Norva24 Group AB (Publ) Just Missed Earnings - But Analysts Have Updated Their Models

Investors in Norva24 Group AB (Publ) (STO:NORVA) had a good week, as its shares rose 3.3% to close at kr32.04 following the release of its quarterly results. It looks like a pretty bad result, all things considered. Although revenues of kr526m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 46% to hit kr0.097 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Norva24 Group

Following the latest results, Norva24 Group's four analysts are now forecasting revenues of kr2.34b in 2022. This would be a decent 16% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 237% to kr1.01. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr2.26b and earnings per share (EPS) of kr1.02 in 2022. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small increase to to revenue forecasts.

Even though revenue forecasts increased, there was no change to the consensus price target of kr34.25, suggesting the analysts are focused on earnings as the driver of value creation. 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. There are some variant perceptions on Norva24 Group, with the most bullish analyst valuing it at kr38.00 and the most bearish at kr30.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Norva24 Group 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. It's pretty clear that there is an expectation that Norva24 Group's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 21% growth on an annualised basis. This is compared to a historical growth rate of 33% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.8% annually. Even after the forecast slowdown in growth, it seems obvious that Norva24 Group is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster 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.

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 estimates - from multiple Norva24 Group analysts - going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Norva24 Group that you need to take into consideration.

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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.