Earnings Release: Here's Why Analysts Cut Their ContextVision AB (publ) (OB:CONTX) Price Target To kr5.00

ContextVision AB (publ) (OB:CONTX) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to kr4.44 in the week after its latest second-quarter results. It was a curious result overall, with revenues coming in 6.3% below what the analyst had expected, at kr28m. The company broke even in terms of statutory earnings per share (EPS). Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

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After the latest results, the solitary analyst covering ContextVision are now predicting revenues of kr119.3m in 2025. If met, this would reflect a modest 3.2% improvement in revenue compared to the last 12 months. The company is forecast to report a statutory loss of kr0.02 in 2025, a sharp decline from a profit over the last year. In the lead-up to this report, the analyst had been modelling revenues of kr124.3m and earnings per share (EPS) of kr0.03 in 2025. The analyst have made an abrupt about-face on ContextVision, administering a minor downgrade to to revenue forecasts and slashing the earnings outlook from a profit to loss.

View our latest analysis for ContextVision

The consensus price target fell 9.1% to kr5.00, with the analyst 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 period to the end of 2025 brings more of the same, according to the analyst, with revenue forecast to display 6.5% growth on an annualised basis. That is in line with its 7.8% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So it's pretty clear that ContextVision is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that the analyst is expecting ContextVision to become unprofitable next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of ContextVision'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. We have analyst estimates for ContextVision going out as far as 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for ContextVision (1 makes us a bit uncomfortable!) that you need to be mindful 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.