One thing we could say about the analysts on D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi (NASDAQ:HEPS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.
After this downgrade, D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi's six analysts are now forecasting revenues of ₺11b in 2022. This would be a major 54% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching ₺6.53 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of ₺12b and losses of ₺5.34 per share in 2022. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.
The consensus price target fell 18% to ₺101, implicitly signalling that lower earnings per share are a leading indicator for D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi, with the most bullish analyst valuing it at ₺15.67 and the most bearish at ₺3.90 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
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. We can infer from the latest estimates that forecasts expect a continuation of D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi'shistorical trends, as the 41% annualised revenue growth to the end of 2022 is roughly in line with the 41% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 16% annually. So it's pretty clear that D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi is forecast to grow substantially faster than its industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses next year, suggesting all may not be well at D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple D-MARKET Elektronik Hizmetler ve Ticaret Anonim Sirketi analysts - going out to 2023, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.