MilDef Group AB (publ) Just Reported A Surprise Loss: Here's What Analysts Think Will Happen Next

MilDef Group AB (publ) (STO:MILDEF) shareholders are probably feeling a little disappointed, since its shares fell 2.2% to kr62.70 in the week after its latest quarterly results. It looks like a pretty bad result, given that revenues fell 19% short of analyst estimates at kr232m, and the company reported a statutory loss of kr0.29 per share instead of the profit that the analysts had been forecasting. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for MilDef Group

After the latest results, the two analysts covering MilDef Group are now predicting revenues of kr1.24b in 2024. If met, this would reflect a meaningful 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 35% to kr1.40. In the lead-up to this report, the analysts had been modelling revenues of kr1.28b and earnings per share (EPS) of kr2.15 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.6% to kr88.00.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that MilDef Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 37% over the past three years. Compare this to the 9 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 15% per year. Factoring in the forecast slowdown in growth, it looks like MilDef Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for MilDef Group. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of MilDef Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on MilDef Group. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You can also see whether MilDef Group is carrying too much debt, and whether its balance sheet is healthy, for free 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.