kr226: That's What Analysts Think PowerCell Sweden AB (publ) (STO:PCELL) Is Worth After Its Latest Results

A week ago, PowerCell Sweden AB (publ) (STO:PCELL) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. The results overall were credible, with revenues of kr160m beating expectations by 15%. Statutory losses were kr1.44 per share, 12% below what the analysts had forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for PowerCell Sweden

After the latest results, the four analysts covering PowerCell Sweden are now predicting revenues of kr259.2m in 2022. If met, this would reflect a huge 62% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 50% to kr0.72. Before this latest report, the consensus had been expecting revenues of kr254.2m and kr0.72 per share in losses.

As a result, it's unexpected to see that the consensus price target fell 6.4% to kr226, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic PowerCell Sweden analyst has a price target of kr240 per share, while the most pessimistic values it at kr208. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting PowerCell Sweden is an easy business to forecast or the the analysts are all using similar assumptions.

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 analysts are definitely expecting PowerCell Sweden's growth to accelerate, with the forecast 62% annualised growth to the end of 2022 ranking favourably alongside historical growth of 37% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 34% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that PowerCell Sweden is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of PowerCell Sweden's future valuation.

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 Simply Wall St, we have a full range of analyst estimates for PowerCell Sweden going out to 2024, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for PowerCell Sweden that you should be aware of.

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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.