Embellence Group AB (publ) Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders might have noticed that Embellence Group AB (publ) (STO:EMBELL) filed its second-quarter result this time last week. The early response was not positive, with shares down 4.2% to kr27.60 in the past week. Statutory earnings per share fell badly short of expectations, coming in at kr0.09, some 88% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at kr190m. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Embellence Group

Taking into account the latest results, the consensus forecast from Embellence Group's twin analysts is for revenues of kr746.8m in 2022, which would reflect a solid 9.2% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 68% to kr4.27. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr750.8m and earnings per share (EPS) of kr4.14 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of kr40.00, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

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 clear from the latest estimates that Embellence Group's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 7.8% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 2.2% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Embellence Group is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Embellence Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at kr40.00, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Embellence Group going out as far as 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Embellence Group has 3 warning signs we think you should be aware 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.