Sats ASA Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a pretty great week for Sats ASA (OB:SATS) shareholders, with its shares surging 10% to kr19.12 in the week since its latest quarterly results. Sats reported kr1.3b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of kr0.50 beat expectations, being 5.1% higher than what the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Sats

Taking into account the latest results, the most recent consensus for Sats from three analysts is for revenues of kr5.07b in 2024. If met, it would imply a reasonable 3.6% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 34% to kr1.61. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr5.05b and earnings per share (EPS) of kr1.53 in 2024. So the consensus seems to have become somewhat more optimistic on Sats' earnings potential following these results.

The consensus price target was unchanged at kr23.67, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Sats, with the most bullish analyst valuing it at kr25.00 and the most bearish at kr22.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business 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. We can infer from the latest estimates that forecasts expect a continuation of Sats'historical trends, as the 7.3% annualised revenue growth to the end of 2024 is roughly in line with the 6.2% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 7.6% per year. It's clear that while Sats' revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at kr23.67, 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. We have estimates - from multiple Sats analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Sats has 1 warning sign we think you should be aware of.

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.