Earnings Miss: Mips AB (publ) Missed EPS By 9.1% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Mips AB (publ) (STO:MIPS), given that the company fell short of expectations when it released its yearly results last week. Results look to have been somewhat negative - revenue fell 4.5% short of analyst estimates at kr357m, and statutory earnings of kr2.42 per share missed forecasts by 9.1%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Mips

Following the latest results, Mips' five analysts are now forecasting revenues of kr509.2m in 2024. This would be a major 43% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 142% to kr5.85. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr521.0m and earnings per share (EPS) of kr5.90 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of kr370, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Mips' market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Mips, with the most bullish analyst valuing it at kr420 and the most bearish at kr325 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Mips' growth to accelerate, with the forecast 43% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 7.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Mips is expected to grow much faster than its industry.

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. They also downgraded Mips' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at kr370, 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 estimates - from multiple Mips analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 4 warning signs for Mips (2 make us uncomfortable!) that you need to take into consideration.

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

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.