Earnings Miss: Ambu A/S Missed EPS By 6.9% And Analysts Are Revising Their Forecasts

As you might know, Ambu A/S (CPH:AMBU B) recently reported its full-year numbers. Revenues of kr.3.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr.0.97, missing estimates by 6.9%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Ambu

Following the latest results, Ambu's eight analysts are now forecasting revenues of kr.4.19b in 2021. This would be a notable 17% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to shoot up 112% to kr.1.26. Before this earnings report, the analysts had been forecasting revenues of kr.4.10b and earnings per share (EPS) of kr.1.47 in 2021. So it's pretty clear the analysts have mixed opinions on Ambu after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

There's been no major changes to the price target of kr.193, suggesting that the impact of higher forecast sales and lower earnings won't result in a meaningful change to the business' valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Ambu at kr.277 per share, while the most bearish prices it at kr.108. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Ambu's rate of growth is expected to accelerate meaningfully, with the forecast 17% revenue growth noticeably faster than its historical growth of 12%p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 9.6% next year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ambu is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ambu. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider industry. The consensus price target held steady at kr.193, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Ambu analysts - going out to 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Ambu that we have uncovered.

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