Earnings Update: engcon AB (publ) (STO:ENGCON B) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

engcon AB (publ) (STO:ENGCON B) just released its latest yearly report and things are not looking great. engcon missed analyst forecasts, with revenues of kr1.6b and statutory earnings per share (EPS) of kr1.42, falling short by 3.3% and 4.1% respectively. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for engcon

Taking into account the latest results, the current consensus from engcon's three analysts is for revenues of kr2.18b in 2025. This would reflect a sizeable 32% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 53% to kr2.18. In the lead-up to this report, the analysts had been modelling revenues of kr2.16b and earnings per share (EPS) of kr2.29 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr108, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on engcon, with the most bullish analyst valuing it at kr115 and the most bearish at kr100.00 per share. This is a very narrow spread of estimates, implying either that engcon is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. It's clear from the latest estimates that engcon's rate of growth is expected to accelerate meaningfully, with the forecast 32% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 6.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.7% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect engcon to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 engcon going out to 2027, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.