Results: Mips AB (publ) Beat Earnings Expectations And Analysts Now Have New Forecasts

Mips AB (publ) (STO:MIPS) investors will be delighted, with the company turning in some strong numbers with its latest results. Mips delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting kr133m-11% above indicated-andkr1.53-28% above forecasts- respectively 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Mips after the latest results.

View our latest analysis for Mips

Taking into account the latest results, the consensus forecast from Mips' five analysts is for revenues of kr494.6m in 2024. This reflects a major 29% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 77% to kr5.48. Before this earnings report, the analysts had been forecasting revenues of kr494.5m and earnings per share (EPS) of kr5.54 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 consensus price target rose 31% to kr525despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Mips' earnings by assigning a price premium. 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 kr650 and the most bearish at kr325 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 Mips' rate of growth is expected to accelerate meaningfully, with the forecast 67% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.7% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Mips to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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

It is also worth noting that we have found 1 warning sign for Mips 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.

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