Earnings Update: Here's Why Analysts Just Lifted Their Azelio AB (publ) (STO:AZELIO) Price Target To kr43.50

Last week, you might have seen that Azelio AB (publ) (STO:AZELIO) released its third-quarter result to the market. The early response was not positive, with shares down 7.2% to kr33.40 in the past week. It was a weak result overall, with Azelio reporting kr25m in revenues, which was 23% less than what the analysts had expected. 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'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 Azelio

Taking into account the latest results, the most recent consensus for Azelio from two analysts is for revenues of kr224.5m in 2021 which, if met, would be a substantial 75% increase on its sales over the past 12 months. The loss per share is expected to ameliorate slightly, reducing to kr2.40. Yet prior to the latest earnings, the analysts had been forecasting revenues of kr224.4m and losses of kr2.11 per share in 2021. While next year's revenue estimates held steady, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Despite expectations of heavier losses next year,the analysts have lifted their price target 25% to kr43.50, perhaps implying these losses are not expected to be recurring over the long term.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Azelio's rate of growth is expected to accelerate meaningfully, with the forecast 75% revenue growth noticeably faster than its historical growth of 32%p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 38% next year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Azelio 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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are 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 Azelio going out as far as 2023, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Azelio (including 1 which makes us a bit uncomfortable) .

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This article by Simply Wall St is general in nature. 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.
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