Earnings Update: ContextVision AB (publ) (OB:COV) Just Reported Its Third-Quarter Results And Analysts Are Updating Their Forecasts

Shareholders might have noticed that ContextVision AB (publ) (OB:COV) filed its third-quarter result this time last week. The early response was not positive, with shares down 5.7% to kr18.70 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at kr22m, statutory earnings were in line with expectations, at kr0.02 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on ContextVision after the latest results.

Check out our latest analysis for ContextVision

Taking into account the latest results, the most recent consensus for ContextVision from lone analyst is for revenues of kr114.8m in 2021 which, if met, would be a meaningful 16% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 42% to kr0.19. Before this earnings report, the analyst had been forecasting revenues of kr113.4m and earnings per share (EPS) of kr0.18 in 2021. The analyst seem to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target was unchanged at kr27.00, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that ContextVision's rate of growth is expected to accelerate meaningfully, with the forecast 16% revenue growth noticeably faster than its historical growth of 7.3%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 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that ContextVision is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ContextVision's earnings potential next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for ContextVision going out as far as 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for ContextVision you should be aware of.

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