Candles Scandinavia AB (publ) Beat Revenue Forecasts By 31%: Here's What Analysts Are Forecasting Next

The quarterly results for Candles Scandinavia AB (publ) (STO:CANDLE B) were released last week, making it a good time to revisit its performance. Revenue of kr73m came in a notable 31% ahead of expectations, while statutory earnings of kr0.11 were in line with what the analysts had been forecasting. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Candles Scandinavia

Following the latest results, Candles Scandinavia's dual analysts are now forecasting revenues of kr179.0m in 2024. This would be a credible 6.3% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Candles Scandinavia forecast to report a statutory profit of kr1.88 per share. In the lead-up to this report, the analysts had been modelling revenues of kr184.5m and earnings per share (EPS) of kr2.94 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

What's most unexpected is that the consensus price target rose 6.0% to kr57.60, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

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 Candles Scandinavia's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 1.8% per year. So it's clear that despite the slowdown in growth, Candles Scandinavia is still expected to grow meaningfully 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 Candles Scandinavia. Unfortunately, they also downgraded their revenue estimates, and our data indicates that is expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Candles Scandinavia going out as far as 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Candles Scandinavia that you need to be mindful 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.