Pexip Holding ASA (OB:PEXIP) Analysts Are Pretty Bullish On The Stock After Recent Results

As you might know, Pexip Holding ASA (OB:PEXIP) just kicked off its latest annual results with some very strong numbers. It looks like a positive result overall, with revenues of kr679m beating forecasts by 6.3%. Statutory losses of kr0.95 per share were 6.3% smaller than the analysts expected, likely helped along by the higher revenues. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Pexip Holding

Taking into account the latest results, the consensus forecast from Pexip Holding's two analysts is for revenues of kr868.2m in 2021, which would reflect a huge 28% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching kr2.62 per share. Before this earnings announcement, the analysts had been modelling revenues of kr854.4m and losses of kr2.14 per share in 2021. So it's pretty clear the analysts have mixed opinions on Pexip Holding even after this update; although they reconfirmed their revenue numbers, it came at the cost of a very substantial increase in per-share losses.

Despite expectations of heavier losses next year,the analysts have lifted their price target 11% to kr132, perhaps implying these losses are not expected to be recurring over the long term.

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. It's pretty clear that there is an expectation that Pexip Holding's revenue growth will slow down substantially, with revenues next year expected to grow 28%, compared to a historical growth rate of 83% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 21% next year. Even after the forecast slowdown in growth, it seems obvious that Pexip Holding is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for 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 also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Pexip Holding going out as far as 2025, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Pexip Holding (1 is potentially serious!) that we have uncovered.

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