New Wave Group AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models

New Wave Group AB (publ) (STO:NEWA B) just released its latest quarterly report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at kr2.3b, statutory earnings missed forecasts by an incredible 21%, coming in at just kr1.54 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for New Wave Group

Taking into account the latest results, the current consensus from New Wave Group's three analysts is for revenues of kr10.2b in 2025. This would reflect a notable 8.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 27% to kr8.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr10.4b and earnings per share (EPS) of kr9.01 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of kr133, suggesting the downgrades are not expected to have a long-term impact on New Wave Group's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic New Wave Group analyst has a price target of kr140 per share, while the most pessimistic values it at kr126. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 New Wave Group's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.5% annually. Factoring in the forecast slowdown in growth, it looks like New Wave Group is forecast to grow at about the same rate as the wider 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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at kr133, 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 forecasts for New Wave Group going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - New Wave Group has 1 warning sign 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.