Earnings Miss: Garo Aktiebolag (publ) Missed EPS By 41% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Garo Aktiebolag (publ) (STO:GARO), given that the company fell short of expectations when it released its full-year results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at kr1.4b, statutory earnings missed forecasts by an incredible 41%, coming in at just kr0.63 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Garo Aktiebolag after the latest results.

Check out our latest analysis for Garo Aktiebolag

Taking into account the latest results, the current consensus, from the dual analysts covering Garo Aktiebolag, is for revenues of kr1.32b in 2024. This implies a small 5.1% reduction in Garo Aktiebolag's revenue over the past 12 months. Per-share earnings are expected to shoot up 73% to kr1.08. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr1.33b and earnings per share (EPS) of kr1.86 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

The consensus price target held steady at kr42.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 5.1% by the end of 2024. This indicates a significant reduction from annual growth of 9.9% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 15% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Garo Aktiebolag is expected to lag 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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at kr42.00, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Garo Aktiebolag going out as far as 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Garo Aktiebolag (1 is potentially serious!) that you need to take into consideration.

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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.