Seafire AB (publ) Beat Analyst Profit Forecasts, And Analysts Have New Estimates

It's been a mediocre week for Seafire AB (publ) (STO:SEAF) shareholders, with the stock dropping 16% to kr18.30 in the week since its latest yearly results. It was overall a positive result, with revenues beating expectations by 3.3% to hit kr935m. Seafire also reported a statutory profit of kr0.21, which was a nice improvement from the loss that the analyst were predicting. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Seafire

Taking into account the latest results, the most recent consensus for Seafire from single analyst is for revenues of kr1.16b in 2023 which, if met, would be a major 24% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 492% to kr0.89. Yet prior to the latest earnings, the analyst had been anticipated revenues of kr1.16b and earnings per share (EPS) of kr1.89 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the pretty serious reduction to new EPS forecasts.

The average price target fell 18% to kr27.50, with reduced earnings forecasts clearly tied to a lower valuation estimate.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Seafire's past performance and to peers in the same industry. We would highlight that Seafire's revenue growth is expected to slow, with the forecast 24% annualised growth rate until the end of 2023 being well below the historical 56% 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) 15% per year. Even after the forecast slowdown in growth, it seems obvious that Seafire is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Seafire. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Seafire. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Seafire that 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.