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

Systemair AB (publ) (STO:SYSR) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at kr2.2b, statutory earnings missed forecasts by an incredible 20%, coming in at just kr2.70 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Systemair

Following last week's earnings report, Systemair's three analysts are forecasting 2021 revenues to be kr8.52b, approximately in line with the last 12 months. Statutory earnings per share are predicted to leap 52% to kr8.31. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr8.85b and earnings per share (EPS) of kr8.91 in 2021. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The analysts made no major changes to their price target of kr220, suggesting the downgrades are not expected to have a long-term impact on Systemair's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Systemair at kr270 per share, while the most bearish prices it at kr168. 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.

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 Systemair's revenue growth is expected to slow, with forecast 0.5% increase next year well below the historical 8.7%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Systemair is also expected to grow slower than other industry participants.

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. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Systemair. Long-term earnings power is much more important than next year's profits. We have forecasts for Systemair going out to 2023, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Systemair that you need to take into consideration.

If you’re looking to trade Systemair, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. 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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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