Netel Holding AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models

It's been a sad week for Netel Holding AB (publ) (STO:NETEL), who've watched their investment drop 12% to kr13.00 in the week since the company reported its annual result. It was not a great result overall. While revenues of kr3.5b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 18% to hit kr0.91 per share. 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 Netel Holding

Taking into account the latest results, the consensus forecast from Netel Holding's two analysts is for revenues of kr3.76b in 2024. This reflects a solid 8.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 178% to kr2.52. Before this earnings report, the analysts had been forecasting revenues of kr3.76b and earnings per share (EPS) of kr2.70 in 2024. 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.

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 11% to kr24.50, suggesting the revised estimates are not indicative of a weaker long-term future for the business.

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. We would highlight that Netel Holding's revenue growth is expected to slow, with the forecast 8.6% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.5% per year. So it's pretty clear that, while Netel Holding's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Netel Holding. 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. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Netel Holding. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Netel Holding going out as far as 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Netel Holding (1 shouldn't be ignored!) 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.