Arcoma AB (STO:ARCOMA) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Last week, you might have seen that Arcoma AB (STO:ARCOMA) released its second-quarter result to the market. The early response was not positive, with shares down 7.2% to kr8.50 in the past week. Arcoma's revenues suffered a miss, falling 15% short of forecasts, at kr31m. Statutory earnings per share (EPS) however performed much better, reaching break-even. 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from Arcoma's single analyst is for revenues of kr145.0m in 2025. This reflects a satisfactory 6.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 56% to kr0.65. In the lead-up to this report, the analyst had been modelling revenues of kr153.0m and earnings per share (EPS) of kr0.73 in 2025. The analyst seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

See our latest analysis for Arcoma

It'll come as no surprise then, to learn that the analyst has cut their price target 8.0% to kr11.50.

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. The analyst is definitely expecting Arcoma's growth to accelerate, with the forecast 14% annualised growth to the end of 2025 ranking favourably alongside historical growth of 7.4% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 20% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Arcoma is expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 Arcoma. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Arcoma going out as far as 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Arcoma , and understanding them should be part of your investment process.

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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.