Sitowise Group Oyj Just Missed EPS By 10%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Sitowise Group Oyj (HEL:SITOWS) filed its yearly result this time last week. The early response was not positive, with shares down 9.9% to €6.40 in the past week. Revenues were in line with forecasts, at €180m, although statutory earnings per share came in 10% below what the analysts expected, at €0.22 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Sitowise Group Oyj

Taking into account the latest results, the consensus forecast from Sitowise Group Oyj's three analysts is for revenues of €192.9m in 2022, which would reflect a credible 7.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 88% to €0.41. In the lead-up to this report, the analysts had been modelling revenues of €192.1m and earnings per share (EPS) of €0.44 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 5.9% to €9.03, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 Sitowise Group Oyj analyst has a price target of €10.00 per share, while the most pessimistic values it at €7.60. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sitowise Group Oyj is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Sitowise Group Oyj's revenue growth is expected to slow, with the forecast 7.0% annualised growth rate until the end of 2022 being well below the historical 11% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 2.8% annually. Even after the forecast slowdown in growth, it seems obvious that Sitowise Group Oyj is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sitowise Group Oyj going out to 2024, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Sitowise Group Oyj (1 is concerning) 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.