Investors in Atea ASA (OB:ATEA) had a good week, as its shares rose 4.6% to close at kr147 following the release of its first-quarter results. Revenues of kr8.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr1.44, missing estimates by 8.3%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the four analysts covering Atea are now predicting revenues of kr39.3b in 2025. If met, this would reflect a solid 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 31% to kr8.74. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr38.1b and earnings per share (EPS) of kr9.44 in 2025. So it's pretty clear consensus is mixed on Atea after the latest results; whilethe analysts lifted revenue numbers, they also administered a minor downgrade to per-share earnings expectations.
See our latest analysis for Atea
Curiously, the consensus price target rose 7.1% to kr151. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Atea at kr170 per share, while the most bearish prices it at kr132. This is a very narrow spread of estimates, implying either that Atea is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Atea's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Atea is forecast to grow faster in the future than it has in the past, with revenues expected to display 14% annualised growth until the end of 2025. If achieved, this would be a much better result than the 1.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.3% annually. Not only are Atea's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Atea. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Atea. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Atea analysts - going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - Atea has 1 warning sign we think 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.