W5 Solutions AB (publ) Just Recorded A 156% EPS Beat: Here's What Analysts Are Forecasting Next

W5 Solutions AB (publ) (STO:W5) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Statutory revenue of kr114m and earnings of kr0.44 both blasted past expectations, beating expectations by 69% and 156%, respectively, ahead of expectations. 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. 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 W5 Solutions

Taking into account the latest results, the current consensus from W5 Solutions' dual analysts is for revenues of kr376.2m in 2023. This would reflect a sizeable 33% increase on its revenue over the past 12 months. Per-share earnings are expected to increase 7.6% to kr1.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr342.9m and earnings per share (EPS) of kr2.00 in 2023. While next year's revenue estimates increased, there was also a pretty serious reduction to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

Curiously, the consensus price target rose 20% to kr103. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting W5 Solutions' growth to accelerate, with the forecast 78% annualised growth to the end of 2023 ranking favourably alongside historical growth of 31% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect W5 Solutions to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for W5 Solutions. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 analyst estimates for W5 Solutions going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for W5 Solutions (1 is a bit unpleasant!) that you need to take into consideration.

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.