Earnings Miss: Gofore Oyj Missed EPS By 17% And Analysts Are Revising Their Forecasts

By
Simply Wall St
Published
August 17, 2021
HLSE:GOFORE
Source: Shutterstock

Investors in Gofore Oyj (HEL:GOFORE) had a good week, as its shares rose 6.5% to close at €20.40 following the release of its half-year results. It was not a great result overall. Although revenues beat expectations, hitting €52m, statutory earnings missed analyst forecasts by 17%, coming in at just €0.27 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Gofore Oyj

earnings-and-revenue-growth
HLSE:GOFORE Earnings and Revenue Growth August 18th 2021

Taking into account the latest results, the most recent consensus for Gofore Oyj from three analysts is for revenues of €102.1m in 2021 which, if met, would be a meaningful 10% increase on its sales over the past 12 months. Per-share earnings are expected to rise 5.1% to €0.56. In the lead-up to this report, the analysts had been modelling revenues of €102.1m and earnings per share (EPS) of €0.69 in 2021. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

The consensus price target held steady at €20.17, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Gofore Oyj analyst has a price target of €21.50 per share, while the most pessimistic values it at €18.00. This is a very narrow spread of estimates, implying either that Gofore Oyj is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Gofore Oyj's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Gofore Oyj'shistorical trends, as the 21% annualised revenue growth to the end of 2021 is roughly in line with the 22% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 2.9% per year. So although Gofore Oyj is expected to maintain its revenue growth rate, it's definitely 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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at €20.17, with the latest estimates not enough to have an impact on their price targets.

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 Gofore Oyj going out to 2023, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Gofore Oyj you should be aware of.

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