Results: Detection Technology Oyj Beat Earnings Expectations And Analysts Now Have New Forecasts

Investors in Detection Technology Oyj (HEL:DETEC) had a good week, as its shares rose 5.5% to close at €15.25 following the release of its full-year results. Revenues were €104m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at €0.38, an impressive 20% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Detection Technology Oyj

After the latest results, the five analysts covering Detection Technology Oyj are now predicting revenues of €113.1m in 2024. If met, this would reflect a meaningful 8.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 95% to €0.73. Before this earnings report, the analysts had been forecasting revenues of €115.5m and earnings per share (EPS) of €0.70 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The average price target increased 7.6% to €19.50, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Detection Technology Oyj, with the most bullish analyst valuing it at €25.00 and the most bearish at €16.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Detection Technology Oyj shareholders.

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 Detection Technology Oyj's growth to accelerate, with the forecast 8.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.9% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.3% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Detection Technology Oyj is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Detection Technology Oyj's earnings potential next year. They also downgraded Detection Technology Oyj's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 Detection Technology Oyj going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Detection Technology Oyj Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.