Savaria Corporation Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on Savaria Corporation (TSE:SIS), given that the company fell short of expectations when it released its quarterly results last week. Results look to have been somewhat negative - revenue fell 4.1% short of analyst estimates at CA$214m, and statutory earnings of CA$0.18 per share missed forecasts by 5.3%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Savaria after the latest results.

Check out our latest analysis for Savaria

Taking into account the latest results, the most recent consensus for Savaria from six analysts is for revenues of CA$949.8m in 2025. If met, it would imply a meaningful 10% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 72% to CA$1.11. Before this earnings report, the analysts had been forecasting revenues of CA$957.4m and earnings per share (EPS) of CA$1.03 in 2025. So the consensus seems to have become somewhat more optimistic on Savaria's earnings potential following these results.

There's been no major changes to the consensus price target of CA$26.64, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Savaria, with the most bullish analyst valuing it at CA$30.00 and the most bearish at CA$25.00 per share. With such a narrow range of valuations, the 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. It's pretty clear that there is an expectation that Savaria's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 20% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.7% annually. Factoring in the forecast slowdown in growth, it looks like Savaria is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Savaria following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Savaria going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Savaria .

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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.