Results: engcon AB (publ) Exceeded Expectations And The Consensus Has Updated Its Estimates

engcon AB (publ) (STO:ENGCON B) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 4.1% to hit kr394m. engcon also reported a statutory profit of kr0.32, which was an impressive 88% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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 engcon

Taking into account the latest results, the most recent consensus for engcon from three analysts is for revenues of kr1.92b in 2024. If met, it would imply a substantial 20% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 48% to kr1.77. In the lead-up to this report, the analysts had been modelling revenues of kr1.75b and earnings per share (EPS) of kr1.34 in 2024. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a sizeable expansion in earnings per share in particular.

It will come as no surprise to learn that the analysts have increased their price target for engcon 21% to kr90.50on the back of these upgrades. 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 engcon at kr105 per share, while the most bearish prices it at kr76.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await engcon shareholders.

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. For example, we noticed that engcon's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 28% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 27% a year over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 4.3% annually. Not only are engcon's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than 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 engcon following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 forecasts for engcon going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for engcon that we have uncovered.

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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.