Earnings Miss: OKEA ASA Missed EPS By 39% And Analysts Are Revising Their Forecasts

It's been a good week for OKEA ASA (OB:OKEA) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.3% to kr33.44. Revenues of kr3.0b smashed analyst forecasts, although statutory earnings came up 39% short, at kr2.18 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on OKEA after the latest results.

Check out our latest analysis for OKEA

After the latest results, the four analysts covering OKEA are now predicting revenues of kr9.56b in 2023. If met, this would reflect a notable 17% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 32% to kr9.16. In the lead-up to this report, the analysts had been modelling revenues of kr9.60b and earnings per share (EPS) of kr9.87 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr45.40, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on OKEA, with the most bullish analyst valuing it at kr55.00 and the most bearish at kr40.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that OKEA's revenue growth is expected to slow, with the forecast 23% annualised growth rate until the end of 2023 being well below the historical 46% p.a. growth over the last five years. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 12% annually. Factoring in the forecast slowdown in growth, it's pretty clear that OKEA is still expected to grow faster than the wider 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. Fortunately, they also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that OKEA's revenue is expected to perform better than the wider industry. The consensus price target held steady at kr45.40, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for OKEA going out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for OKEA that you need to take into consideration.

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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.