SSH Communications Security Oyj (HEL:SSH1V) Just Reported And Analysts Have Been Lifting Their Price Targets

The analyst might have been a bit too bullish on SSH Communications Security Oyj (HEL:SSH1V), given that the company fell short of expectations when it released its quarterly results last week. It was not a great statutory result, with revenues coming in 21% lower than the analyst predicted. Unsurprisingly, earnings also fell seriously short of forecasts, turning into a per-share loss of €0.05. This is an important time for investors, as they can track a company's performance in its report, look at what expert is 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 analyst latest (statutory) post-earnings forecasts for next year.

See our latest analysis for SSH Communications Security Oyj

Taking into account the latest results, the current consensus from SSH Communications Security Oyj's one analyst is for revenues of €17.0m in 2021, which would reflect a sizeable 58% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 31% to €0.09. Before this earnings announcement, the analyst had been modelling revenues of €17.5m and losses of €0.08 per share in 2021. So it's pretty clear the analyst has mixed opinions on SSH Communications Security Oyj after this update; revenues were downgraded and per-share losses expected to increase.

The analyst lifted their price target 60% to €1.60, implicitly signalling that lower earnings per share are not expected to have a longer-term impact on the stock's value.

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 SSH Communications Security Oyj's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 84% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 3.7% 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 17% annually. Not only are SSH Communications Security Oyj's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at SSH Communications Security Oyj. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analyst clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for SSH Communications Security Oyj that you need to be mindful of.

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