Carasent ASA Beat Analyst Profit Forecasts, And Analysts Have New Estimates

There's been a notable change in appetite for Carasent ASA (OB:CARA) shares in the week since its full-year report, with the stock down 11% to kr30.25. Although revenues of kr137m were in line with analyst expectations, Carasent surprised on the earnings front, with an unexpected (statutory) profit of kr0.01 per share a nice improvement on the losses that the analystsforecast. 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 Carasent after the latest results.

Check out our latest analysis for Carasent

Taking into account the latest results, the most recent consensus for Carasent from two analysts is for revenues of kr209.3m in 2022 which, if met, would be a huge 53% increase on its sales over the past 12 months. Statutory earnings per share are predicted to jump 3,357% to kr0.28. In the lead-up to this report, the analysts had been modelling revenues of kr199.6m and earnings per share (EPS) of kr0.31 in 2022. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a huge to revenue, the consensus also made a minor downgrade to its earnings per share forecasts.

The analysts also cut Carasent's price target 9.2% to kr54.00, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in sales.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Carasent's past performance and to peers in the same industry. It's clear from the latest estimates that Carasent's rate of growth is expected to accelerate meaningfully, with the forecast 53% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 7.9% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 33% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Carasent is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Carasent. Happily, they also upgraded their revenue estimates, and are forecasting revenues 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 Carasent's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Carasent that 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.