Analysts Have Lowered Expectations For ADDvise Group AB (publ) (STO:ADDV A) After Its Latest Results

ADDvise Group AB (publ) (STO:ADDV A) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at kr412m, statutory earnings were in line with expectations, at kr0.56 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for ADDvise Group

Taking into account the latest results, the consensus forecast from ADDvise Group's dual analysts is for revenues of kr1.69b in 2024. This reflects a solid 9.2% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be kr0.70, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of kr1.79b and earnings per share (EPS) of kr1.00 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

The consensus price target fell 17% to kr19.00, with the weaker earnings outlook clearly leading valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that ADDvise Group's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2024 being well below the historical 37% p.a. growth over the last five years. Compare this to the 60 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it looks like ADDvise Group is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ADDvise Group. 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 analyst estimates for ADDvise Group going out as far as 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with ADDvise Group (including 1 which makes us a bit uncomfortable) .

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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.

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