Sats ASA Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Last week, you might have seen that Sats ASA (OB:SATS) released its quarterly result to the market. The early response was not positive, with shares down 3.4% to kr17.50 in the past week. It looks like a credible result overall - although revenues of kr1.3b were what the analysts expected, Sats surprised by delivering a (statutory) profit of kr0.37 per share, an impressive 37% above what was forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Sats

Taking into account the latest results, the most recent consensus for Sats from three analysts is for revenues of kr5.10b in 2024. If met, it would imply a modest 5.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 36% to kr1.58. In the lead-up to this report, the analysts had been modelling revenues of kr5.05b and earnings per share (EPS) of kr1.51 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of kr23.33, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic Sats analyst has a price target of kr25.00 per share, while the most pessimistic values it at kr21.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 Sats' growth to accelerate, with the forecast 7.7% annualised growth to the end of 2024 ranking favourably alongside historical growth of 5.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 8.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Sats is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sats' earnings potential next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at kr23.33, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Sats. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Sats going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 2 warning signs for Sats (1 is a bit unpleasant!) that you need to take into consideration.

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.