Some Investors May Be Willing To Look Past 1&1's (ETR:1U1) Soft Earnings

Yahoo

19-05-2025

Shareholders appeared unconcerned with 1&1 AG's (ETR:1U1) lackluster earnings report last week. Our analysis suggests that while the profits are soft, the foundations of the business are strong.
Our free stock report includes 2 warning signs investors should be aware of before investing in 1&1. Read for free now.
Importantly, our data indicates that 1&1's profit was reduced by €281m, due to unusual items, over the last year. It's never great to see unusual items costing the company profits, but on the upside, things might improve sooner rather than later. When we analysed the vast majority of listed companies worldwide, we found that significant unusual items are often not repeated. And, after all, that's exactly what the accounting terminology implies. In the twelve months to March 2025, 1&1 had a big unusual items expense. As a result, we can surmise that the unusual items made its statutory profit significantly weaker than it would otherwise be.
That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates.
As we mentioned previously, the 1&1's profit was hampered by unusual items in the last year. Because of this, we think 1&1's underlying earnings potential is as good as, or possibly even better, than the statutory profit makes it seem! Unfortunately, though, its earnings per share actually fell back over the last year. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. You'd be interested to know, that we found 2 warning signs for 1&1 and you'll want to know about them.
This note has only looked at a single factor that sheds light on the nature of 1&1's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful.
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