Evolution AB (publ) Just Recorded A 23% EPS Beat: Here's What Analysts Are Forecasting Next

It's been a pretty great week for Evolution AB (publ) (STO:EVO) shareholders, with its shares surging 10% to kr1,045 in the week since its latest third-quarter results. Revenues were €519m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at €1.57, an impressive 23% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Evolution

Taking into account the latest results, the current consensus from Evolution's 13 analysts is for revenues of €2.38b in 2025. This would reflect a solid 15% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 10% to €6.14. Before this earnings report, the analysts had been forecasting revenues of €2.39b and earnings per share (EPS) of €6.13 in 2025. 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.

There were no changes to revenue or earnings estimates or the price target of kr1,356, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Evolution, with the most bullish analyst valuing it at kr1,766 and the most bearish at kr883 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Evolution's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 33% over the past five years. Compare this to the 20 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while Evolution's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Evolution 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 Evolution 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.