Momentum Group AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Momentum Group AB (publ) (STO:MMGR B) released its annual result to the market. The early response was not positive, with shares down 8.8% to kr76.20 in the past week. Revenues of kr1.7b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr2.70, missing estimates by 8.1%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Momentum Group

Taking into account the latest results, the most recent consensus for Momentum Group from twin analysts is for revenues of kr1.94b in 2023 which, if met, would be a solid 11% increase on its sales over the past 12 months. Statutory earnings per share are predicted to climb 16% to kr3.22. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr1.77b and earnings per share (EPS) of kr3.05 in 2023. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

It will come as no surprise to learn that the analysts have increased their price target for Momentum Group 17% to kr84.00on the back of these upgrades.

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. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 11% growth on an annualised basis. That is in line with its 14% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 3.6% per year. So it's pretty clear that Momentum Group is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Momentum Group's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected 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.

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. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

It might also be worth considering whether Momentum Group's debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.