EKF Diagnostics Holdings plc (LON:EKF) Just Reported Earnings, And Analysts Cut Their Target Price

EKF Diagnostics Holdings plc (LON:EKF) shareholders are probably feeling a little disappointed, since its shares fell 2.3% to UK£0.26 in the week after its latest annual results. EKF Diagnostics Holdings reported in line with analyst predictions, delivering revenues of UK£53m and statutory earnings per share of UK£0.0052, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for EKF Diagnostics Holdings

Taking into account the latest results, the most recent consensus for EKF Diagnostics Holdings from four analysts is for revenues of UK£56.6m in 2024. If met, it would imply a satisfactory 7.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 2.2% to UK£0.0053. Before this earnings report, the analysts had been forecasting revenues of UK£56.8m and earnings per share (EPS) of UK£0.0095 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 5.8% to UK£0.33, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on EKF Diagnostics Holdings, with the most bullish analyst valuing it at UK£0.35 and the most bearish at UK£0.29 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 7.5% growth on an annualised basis. That is in line with its 7.9% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 5.9% per year. So it's pretty clear that EKF Diagnostics Holdings is forecast to grow substantially faster than its 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of EKF Diagnostics Holdings' future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple EKF Diagnostics Holdings analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for EKF Diagnostics Holdings you should be aware of, and 1 of them is significant.

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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.