Investors in Storskogen Group AB (publ) (STO:STOR B) had a good week, as its shares rose 4.4% to close at kr18.38 following the release of its first-quarter results. Sales of kr6.9b surpassed estimates by 7.2%, although statutory earnings per share missed badly, coming in 37% below expectations at kr0.13 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the seven analysts covering Storskogen Group are now predicting revenues of kr32.6b in 2022. If met, this would reflect a huge 51% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 71% to kr0.92. In the lead-up to this report, the analysts had been modelling revenues of kr30.5b and earnings per share (EPS) of kr1.01 in 2022. So it's pretty clear consensus is mixed on Storskogen Group after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.
The analysts also cut Storskogen Group's price target 13% to kr27.96, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in sales. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Storskogen Group, with the most bullish analyst valuing it at kr37.00 and the most bearish at kr24.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. It's pretty clear that there is an expectation that Storskogen Group's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 74% growth on an annualised basis. This is compared to a historical growth rate of 121% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% per year. Even after the forecast slowdown in growth, it seems obvious that Storskogen Group is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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. We have forecasts for Storskogen Group going out to 2024, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Storskogen Group (1 is potentially serious!) 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.