Investors in Betterware de México, S.A.P.I. de C.V. (NYSE:BWMX) had a good week, as its shares rose 2.3% to close at US$12.84 following the release of its quarterly results. Revenues came in at Mex$3.3b, in line with estimates, while Betterware de MéxicoP.I. de reported a statutory loss of Mex$3.10 per share, well short of prior analyst forecasts for a profit. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Betterware de MéxicoP.I. de's twin analysts is for revenues of Mex$14.9b in 2025. This would reflect a solid 8.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 40% to Mex$33.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of Mex$15.1b and earnings per share (EPS) of Mex$39.69 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$20.12, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Betterware de MéxicoP.I. de's revenue growth is expected to slow, with the forecast 6.6% annualised growth rate until the end of 2025 being well below the historical 24% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.9% per year. Even after the forecast slowdown in growth, it seems obvious that Betterware de MéxicoP.I. de is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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 in mind, we wouldn't be too quick to come to a conclusion on Betterware de MéxicoP.I. de. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Betterware de MéxicoP.I. de 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.
