Tekna Holding ASA's (OB:TEKNA) Analyst Just Slashed This Year's Estimates
One thing we could say about the covering analyst on Tekna Holding ASA (OB:TEKNA) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.
Following the downgrade, the current consensus from Tekna Holding's solo analyst is for revenues of CA$31m in 2022 which - if met - would reflect a notable 19% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 21% to CA$0.13. Yet prior to the latest estimates, the analyst had been forecasting revenues of CA$36m and losses of CA$0.084 per share in 2022. Ergo, there's been a clear change in sentiment, with the analyst administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.
View our latest analysis for Tekna Holding
The consensus price target fell 6.5% to kr29.00, implicitly signalling that lower earnings per share are a leading indicator for Tekna Holding's valuation.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Tekna Holding's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Tekna Holding is forecast to grow faster in the future than it has in the past, with revenues expected to display 19% annualised growth until the end of 2022. If achieved, this would be a much better result than the 22% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to decline 0.7% per year. So although Tekna Holding is expected to return to growth, it's also expected to grow revenues during a time when the wider industry is estimated to see revenue decline.
The Bottom Line
The most important thing to take away is that the analyst increased their loss per share estimates for this year. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Tekna Holding.
That said, this broker might have good reason to be negative on Tekna Holding, given a short cash runway. For more information, you can click here to discover this and the 1 other concern we've identified.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
Valuation is complex, but we're here to simplify it.
Discover if Tekna Holding might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
Access Free AnalysisHave 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.
About OB:TEKNA
Tekna Holding
Engages in the development, manufacture, and sale of micron and nano powders, and plasma process solutions in North America, Europe, Asia, and internationally.
Slight and overvalued.