Temenos AG Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Temenos AG (VTX:TEMN) shareholders are probably feeling a little disappointed, since its shares fell 7.6% to CHF58.35 in the week after its latest first-quarter results. Results look mixed – while revenue fell marginally short of analyst estimates at US$232m, statutory earnings beat expectations 6.1%, with Temenos reporting profits of US$0.40 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
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Following last week’s earnings report, Temenos’ 14 analysts are forecasting 2025 revenues to be US$1.04b, approximately in line with the last 12 months. Statutory earnings per share are forecast to descend 11% to US$2.19 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$1.06b and earnings per share (EPS) of US$2.27 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
Check out our latest analysis for Temenos
The consensus price target held steady at CHF69.92, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 CHF91.64 per share, while the most pessimistic values it at CHF45.87. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Temenos shareholders.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Temenos’ past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 1.0% annualised decline to the end of 2025. That is a notable change from historical growth of 2.4% 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 11% annually for the foreseeable future. It’s pretty clear that Temenos’ revenues are expected to perform substantially worse than the wider industry.
