OX2 AB (publ) Recorded A 45% Miss On Revenue: Analysts Are Revisiting Their Models

OX2 AB (publ) (STO:OX2) last week reported its latest first-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were kr944m, 45% shy of what the analysts were expecting, although statutory earnings of kr3.79 per share were roughly in line with what was forecast. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for OX2

Taking into account the latest results, the current consensus from OX2's four analysts is for revenues of kr11.2b in 2024. This would reflect a sizeable 54% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 26% to kr4.06. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr11.7b and earnings per share (EPS) of kr3.78 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

There's been no real change to the average price target of kr70.75, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values OX2 at kr86.00 per share, while the most bearish prices it at kr57.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that OX2's rate of growth is expected to accelerate meaningfully, with the forecast 78% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 17% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that OX2 is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards OX2 following these results. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Still, earnings per share are more important to value creation for shareholders. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for OX2 going out to 2026, and you can see them free on our platform here.

We also provide an overview of the OX2 Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.