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Earnings Release: Here's Why Analysts Cut Their HelloFresh SE (ETR:HFG) Price Target To €3.55
Shareholders of HelloFresh SE (ETR:HFG) will be pleased this week, given that the stock price is up 11% to €2.99 following its latest third-quarter results. Revenues of €1.4b arrived in line with expectations, although statutory losses per share were €0.27, an impressive 38% smaller than what broker models predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the recent earnings report, the consensus from nine analysts covering HelloFresh is for revenues of €5.81b in 2027. This implies a noticeable 6.3% decline in revenue compared to the last 12 months. Statutory losses are forecast to balloon 94% to €0.011 per share. In the lead-up to this report, the analysts had been modelling revenues of €5.81b and earnings per share (EPS) of €0.015 in 2027. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.
View our latest analysis for HelloFresh
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 9.8% to €3.55, with the analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on HelloFresh, with the most bullish analyst valuing it at €8.35 and the most bearish at €1.80 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.1% by the end of 2027. This indicates a significant reduction from annual growth of 0.4% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.9% annually for the foreseeable future. It's pretty clear that HelloFresh's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts are expecting HelloFresh to become unprofitable next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that HelloFresh's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of HelloFresh's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for HelloFresh going out to 2028, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for HelloFresh you should know about.
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