Earnings Update: Here's Why Analysts Just Lifted Their Optomed Oyj (HEL:OPTOMED) Price Target To €6.63

Shareholders of Optomed Oyj (HEL:OPTOMED) will be pleased this week, given that the stock price is up 11% to €5.47 following its latest quarterly results. It looks like a moderately negative result overall with revenues falling 10% short of analyst estimates at €3.3m. Statutory losses were €0.06 per share, roughly in line with what the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Optomed Oyj

Taking into account the latest results, the consensus forecast from Optomed Oyj's three analysts is for revenues of €16.6m in 2024. This reflects a solid 11% improvement in revenue compared to the last 12 months. Losses are expected to be contained, narrowing 11% from last year to €0.22. Before this earnings announcement, the analysts had been modelling revenues of €16.8m and losses of €0.22 per share in 2024.

The average price target fell 14% to €6.63, with the ongoing losses seemingly a concern for the analysts, despite the lack of real change to the earnings forecasts. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Optomed Oyj at €8.00 per share, while the most bearish prices it at €5.80. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Optomed Oyj's growth to accelerate, with the forecast 15% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.9% per annum over the past three years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 15% per year. Optomed Oyj is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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. We have forecasts for Optomed Oyj going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Optomed Oyj (1 is a bit unpleasant!) that you need to take into consideration.

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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.