Revenue Beat: Candles Scandinavia AB (publ) Beat Analyst Estimates By 31%

The investors in Candles Scandinavia AB (publ)'s (STO:CANDLE B) will be rubbing their hands together with glee today, after the share price leapt 29% to kr23.30 in the week following its second-quarter results. Revenue of kr73m beat expectations by an impressive 31%, while statutory earnings per share (EPS) were kr0.11, in line with estimates. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Candles Scandinavia

Taking into account the latest results, the twin analysts covering Candles Scandinavia provided consensus estimates of kr184.5m revenue in 2024, which would reflect a discernible 4.0% decline over the past 12 months. Earnings are expected to improve, with Candles Scandinavia forecast to report a statutory profit of kr1.88 per share. Before this earnings report, the analysts had been forecasting revenues of kr232.9m and earnings per share (EPS) of kr2.94 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a large cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.4% to kr54.35.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.8% by the end of 2024. This indicates a significant reduction from annual growth of 27% over the last five years. Yet aggregate analyst estimates for other companies in the industry suggest that industry revenues are forecast to decline 4.0% per year. The forecasts do look bearish for Candles Scandinavia, since they're expecting it to shrink faster than the industry.

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. Unfortunately they also downgraded their revenue estimates, and our analysts estimates suggest that Candles Scandinavia is still expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Candles Scandinavia. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Candles Scandinavia going out as far as 2026, and you can see them free on our platform here.

It is also worth noting that we have found 4 warning signs for Candles Scandinavia 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.