Revenue Beat: Norconsult ASA Exceeded Revenue Forecasts By 10% And Analysts Are Updating Their Estimates

Norconsult ASA (OB:NORCO) just released its latest quarterly results and things are looking bullish. It was a positive result, with revenues and statutory earnings per share (EPS) both performing well. Revenues were 10% higher than the analysts had forecast, at kr2.9b, while EPS of kr0.85 beat analyst models by 4.5%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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Taking into account the latest results, the three analysts covering Norconsult provided consensus estimates of kr9.85b revenue in 2025, which would reflect a not inconsiderable 8.2% decline over the past 12 months. Per-share earnings are expected to increase 9.3% to kr2.36. In the lead-up to this report, the analysts had been modelling revenues of kr10.4b and earnings per share (EPS) of kr2.37 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

View our latest analysis for Norconsult

The consensus has reconfirmed its price target of kr48.83, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Norconsult's market value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Norconsult at kr52.00 per share, while the most bearish prices it at kr46.50. This is a very narrow spread of estimates, implying either that Norconsult 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 Norconsult's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 11% by the end of 2025. This indicates a significant reduction from annual growth of 12% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Norconsult is expected to lag the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Norconsult going out to 2027, and you can see them free on our platform here.

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

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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.