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Shares of Allegro experienced a decline on Thursday after the company forecasted a slowdown in earnings growth for the third quarter of 2024. At 5:12 am (0912 GMT), the stock was down 7.8%, trading at PLN 35.70.
Allegro anticipates that the growth of gross merchandise volume (GMV) in Poland will decelerate to a range of 10-11%, which is below the 12% projected by analysts. Revenue growth in Poland is expected to be between 16-18%, also falling short of the 19% forecasted by market experts. Furthermore, adjusted EBITDA growth in Poland is projected to slow to 11-13%, considerably lower than the 15% that market analysts had anticipated.
On a consolidated basis, Allegro expects GMV growth of 9-10%, again below the 12% forecasted by the consensus. The company is forecasting revenue growth in the range of 8-10%, compared to the 12% predicted by analysts. Adjusted EBITDA growth is expected to be between 5-8%, not meeting the 12% expected by the market.
Analysts at J.P. Morgan noted that some profit-taking in the shares might occur, given that earnings growth has peaked and there does not seem to be immediate upside to expectations for fiscal year 2024 implied by the third-quarter guidance. They also indicated concerns about ongoing losses in international operations.
In its second-quarter results, Allegro reported strong performance, surpassing expectations in key metrics. The Polish GMV increased by 12% year-over-year to PLN 15 billion, slightly above both company guidance and consensus estimates. Adjusted EBITDA in Poland reached PLN 908 million, reflecting a 35% increase compared to the prior year, which was not only 4% ahead of consensus but also exceeded the company’s initial guidance of 26-29% growth.
At the group level, consolidated adjusted EBITDA was PLN 763 million, marking a 32% year-over-year increase and surpassing consensus estimates by 3%. However, international operations recorded an adjusted EBITDA loss of PLN 145 million, aligning with the consensus forecast of a PLN 138 million loss.
Analysts at UBS commented that while the second-quarter results are strong, the weaker guidance is likely to dominate discussions and could lead to consensus downgrades.
