Earnings Release: Here's Why Analysts Cut Their LINK Mobility Group Holding ASA (OB:LINK) Price Target To kr27.00

Shareholders of LINK Mobility Group Holding ASA (OB:LINK) will be pleased this week, given that the stock price is up 15% to kr15.50 following its latest annual results. It was an okay result overall, with revenues coming in at kr4.4b, roughly what the analysts had been expecting. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for LINK Mobility Group Holding

Taking into account the latest results, the current consensus from LINK Mobility Group Holding's dual analysts is for revenues of kr5.15b in 2022, which would reflect a decent 17% increase on its sales over the past 12 months. Earnings are expected to improve, with LINK Mobility Group Holding forecast to report a statutory profit of kr0.01 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr5.12b and earnings per share (EPS) of kr0.01 in 2022. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With no major changes to earnings forecasts, the consensus price target fell 27% to kr27.00, suggesting that the analysts might have previously been hoping for an earnings upgrade.

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. We would highlight that LINK Mobility Group Holding's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2022 being well below the historical 31% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 23% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than LINK Mobility Group Holding.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that LINK Mobility Group Holding's revenues are expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on LINK Mobility Group Holding. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

It is also worth noting that we have found 2 warning signs for LINK Mobility Group Holding that you need to take into consideration.

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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.