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

Sdiptech AB (publ) (STO:SDIP B) came out with its second-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was a pretty mixed result, with revenues beating expectations to hit kr1.4b. Statutory earnings fell 7.2% short of analyst forecasts, reaching kr2.95 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Sdiptech

Taking into account the latest results, the most recent consensus for Sdiptech from four analysts is for revenues of kr5.55b in 2024. If met, it would imply a reasonable 4.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to climb 16% to kr13.13. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr5.53b and earnings per share (EPS) of kr13.37 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

The analysts reconfirmed their price target of kr391, showing that the business is executing well and in line with expectations. 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 Sdiptech, with the most bullish analyst valuing it at kr400 and the most bearish at kr380 per share. This is a very narrow spread of estimates, implying either that Sdiptech is an easy company to value, or - more likely - the analysts are relying heavily on some key 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 Sdiptech's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.8% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.5% per year. So it's pretty clear that, while Sdiptech's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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 held steady at kr391, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Sdiptech going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Sdiptech , and understanding this should be part of your investment process.

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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.

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