Results: Netel Holding AB (publ) Delivered A Surprise Loss And Now Analysts Have New Forecasts

Shareholders in Netel Holding AB (publ) (STO:NETEL) had a terrible week, as shares crashed 40% to kr19.60 in the week since its latest quarterly results. Revenues fell 9.8% short of expectations, at kr684m. Earnings correspondingly dipped, with Netel Holding reporting a statutory loss of kr0.18 per share, whereas the analysts had previously modelled a profit in this period. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Netel Holding

Following the latest results, Netel Holding's two analysts are now forecasting revenues of kr3.30b in 2023. This would be a modest 3.2% improvement in sales compared to the last 12 months. Per-share earnings are expected to ascend 13% to kr2.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr3.65b and earnings per share (EPS) of kr3.58 in 2023. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 41% to kr29.00.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Netel Holding's past performance and to peers in the same industry. We would highlight that Netel Holding's revenue growth is expected to slow, with the forecast 4.3% annualised growth rate until the end of 2023 being well below the historical 22% growth over the last year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.3% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Netel Holding.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Netel Holding's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

You still need to take note of risks, for example - Netel Holding has 4 warning signs (and 1 which is a bit unpleasant) we think you should know about.

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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.