Earnings Miss: Sitowise Group Oyj Missed EPS By 23% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Sitowise Group Oyj (HEL:SITOWS) released its annual result to the market. The early response was not positive, with shares down 8.7% to €2.61 in the past week. It looks like a pretty bad result, all things considered. Although revenues of €211m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 23% to hit €0.16 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sitowise Group Oyj after the latest results.

View our latest analysis for Sitowise Group Oyj

After the latest results, the consensus from Sitowise Group Oyj's three analysts is for revenues of €204.8m in 2024, which would reflect a perceptible 3.1% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to jump 31% to €0.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of €211.0m and earnings per share (EPS) of €0.26 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 7.3% to €3.37, with the weaker earnings outlook clearly leading valuation estimates. 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. Currently, the most bullish analyst values Sitowise Group Oyj at €3.80 per share, while the most bearish prices it at €3.00. 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. We would highlight that revenue is expected to reverse, with a forecast 3.1% annualised decline to the end of 2024. That is a notable change from historical growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 7.4% annually for the foreseeable future. It's pretty clear that Sitowise Group Oyj's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sitowise Group Oyj. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Sitowise Group Oyj analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Sitowise Group Oyj (1 is concerning!) that you should be aware 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.