Results: Temenos AG Beat Earnings Expectations And Analysts Now Have New Forecasts
Temenos AG (VTX:TEMN) shareholders are probably feeling a little disappointed, since its shares fell 9.6% to CHF61.80 in the week after its latest quarterly results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at US$282m, statutory earnings beat expectations by a notable 14%, coming in at US$1.00 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Temenos' 15 analysts is for revenues of US$1.17b in 2026. This reflects a satisfactory 5.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 18% to US$3.32. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.16b and earnings per share (EPS) of US$3.30 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
View our latest analysis for Temenos
There were no changes to revenue or earnings estimates or the price target of CHF82.29, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Temenos analyst has a price target of CHF101 per share, while the most pessimistic values it at CHF54.59. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Temenos' rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 3.5% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.9% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Temenos is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Temenos going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Temenos that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.