Evolution AB (publ) (STO:EVO) Second-Quarter Results: Here's What Analysts Are Forecasting For This Year

Evolution AB (publ) (STO:EVO) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 2.3% short of analyst estimates at €508m, and statutory earnings of €1.28 per share missed forecasts by 2.7%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Evolution

Taking into account the latest results, the current consensus from Evolution's 14 analysts is for revenues of €2.11b in 2024. This would reflect a decent 8.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 2.2% to €5.30. In the lead-up to this report, the analysts had been modelling revenues of €2.12b and earnings per share (EPS) of €5.34 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 analysts reconfirmed their price target of kr1,476, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Evolution at kr1,758 per share, while the most bearish prices it at kr899. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Evolution's past performance and to peers in the same industry. We would highlight that Evolution's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2024 being well below the historical 35% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% per year. So it's pretty clear that, while Evolution's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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 major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at kr1,476, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Evolution going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Evolution that you need to be mindful 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.

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