Earnings Update: Edda Wind ASA (OB:EWIND) Just Reported And Analysts Are Trimming Their Forecasts

The quarterly results for Edda Wind ASA (OB:EWIND) were released last week, making it a good time to revisit its performance. It was a curious result overall, with revenues coming in 17% below what the analysts had expected, at €9.2m. The company broke even in terms of statutory earnings per share (EPS). Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Edda Wind

Taking into account the latest results, the most recent consensus for Edda Wind from three analysts is for revenues of €42.5m in 2023. If met, it would imply a huge 38% increase on its revenue over the past 12 months. Edda Wind is also expected to turn profitable, with statutory earnings of €0.013 per share. Before this earnings report, the analysts had been forecasting revenues of €46.7m and earnings per share (EPS) of €0.066 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 7.9% to kr35.00. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Edda Wind at kr36.00 per share, while the most bearish prices it at kr34.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Edda Wind's growth to accelerate, with the forecast 89% annualised growth to the end of 2023 ranking favourably alongside historical growth of 14% per annum over the past year. Compare this with other companies in the same industry, which are forecast to see a revenue decline of 1.7% annually. So it's clear with the acceleration in growth, Edda Wind is expected to grow meaningfully 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 Edda Wind. Sadly they also cut their revenue estimates, although at least the company is expected to perform a bit better 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Edda Wind going out to 2025, and you can see them free on our platform here.

Even so, be aware that Edda Wind is showing 1 warning sign in our investment analysis , you should know about...

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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.