Otovo ASA (OB:OTOVO) Just Reported And Analysts Have Been Cutting Their Estimates

It's been a sad week for Otovo ASA (OB:OTOVO), who've watched their investment drop 12% to kr17.44 in the week since the company reported its full-year result. The statutory results were mixed overall, with revenues of kr652m in line with analyst forecasts, but losses of kr2.49 per share, some 9.8% larger than the analysts were predicting. 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.

See our latest analysis for Otovo

Taking into account the latest results, the most recent consensus for Otovo from twin analysts is for revenues of kr1.07b in 2023 which, if met, would be a substantial 65% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching kr3.74 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of kr1.24b and losses of kr1.15 per share in 2023. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The consensus price target fell 18% to kr29.00, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

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. The analysts are definitely expecting Otovo's growth to accelerate, with the forecast 65% annualised growth to the end of 2023 ranking favourably alongside historical growth of 40% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Otovo to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded their revenue estimates, although industry data suggests that Otovo's revenues are 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 Otovo's future valuation.

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 analyst estimates for Otovo going out as far as 2025, 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 Otovo you should be aware of.

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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.