Earnings Beat: Embla Medical hf. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for Embla Medical hf. (CPH:EMBLA) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.2% to kr.30.80. The result was positive overall - although revenues of US$217m were in line with what the analysts predicted, Embla Medical hf surprised by delivering a statutory profit of US$0.046 per share, modestly greater than expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Embla Medical hf

Taking into account the latest results, the consensus forecast from Embla Medical hf's five analysts is for revenues of US$865.0m in 2024. This reflects an okay 5.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 13% to US$0.16. Before this earnings report, the analysts had been forecasting revenues of US$868.6m and earnings per share (EPS) of US$0.16 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of kr.35.06, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Embla Medical hf analyst has a price target of kr.39.00 per share, while the most pessimistic values it at kr.33.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 Embla Medical hf's rate of growth is expected to accelerate meaningfully, with the forecast 11% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.4% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.2% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Embla Medical hf is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at kr.35.06, 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 forecasts for Embla Medical hf going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Embla Medical hf that you need to be mindful of.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com