North Media A/S Just Missed EPS By 7.6%: Here's What Analysts Think Will Happen Next

It's been a sad week for North Media A/S (CPH:NORTHM), who've watched their investment drop 15% to kr.67.50 in the week since the company reported its annual result. Revenues of kr.949m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr.14.30, missing estimates by 7.6%. Following the result, the analyst has 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. We've gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.

View our latest analysis for North Media

Taking into account the latest results, the current consensus from North Media's solitary analyst is for revenues of kr.1.35b in 2024. This would reflect a huge 42% increase on its revenue over the past 12 months. Statutory earnings per share are expected to tumble 28% to kr.10.53 in the same period. Before this earnings report, the analyst had been forecasting revenues of kr.1.39b and earnings per share (EPS) of kr.9.38 in 2024. Although the analyst has lowered their revenue forecasts, they've also made a nice gain to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

There's been no real change to the average price target of kr.77.50, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that North Media's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 42% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.7% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.2% annually. So it looks like North Media is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards North Media following these results. They also downgraded North Media's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at kr.77.50, with the latest estimates not enough to have an impact on their price target.

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. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with North Media (at least 2 which are a bit concerning) , and understanding them should be part of your investment process.

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

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.