Elmera Group ASA Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

Investors in Elmera Group ASA (OB:ELMRA) had a good week, as its shares rose 2.9% to close at kr35.00 following the release of its second-quarter results. The results were mixed; although revenues of kr2.1b fell 15% short of what the analysts had predicted, per-share (statutory) earnings of kr0.33 beat expectations by 43%. 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 Elmera Group

After the latest results, the consensus from Elmera Group's three analysts is for revenues of kr13.7b in 2024, which would reflect a small 7.9% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to reduce 7.2% to kr1.95 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr14.0b and earnings per share (EPS) of kr1.79 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.

The consensus has made no major changes to the price target of kr32.33, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Elmera Group at kr39.00 per share, while the most bearish prices it at kr23.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 15% by the end of 2024. This indicates a significant reduction from annual growth of 28% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 1.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Elmera Group is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Elmera Group following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, long term profitability is more important for the value creation process. The consensus price target held steady at kr32.33, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Elmera Group analysts - going out to 2026, and you can see them free on our platform here.

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

Have 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.