Earnings Beat: CellaVision AB (publ) Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

CellaVision AB (publ) (STO:CEVI) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 3.7% to hit kr677m. CellaVision reported statutory earnings per share (EPS) kr5.46, which was a notable 16% above what the analysts had forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for CellaVision

Following the latest results, CellaVision's four analysts are now forecasting revenues of kr784.0m in 2024. This would be a notable 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 40% to kr7.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr752.5m and earnings per share (EPS) of kr6.61 in 2024. So it seems there's been a definite increase in optimism about CellaVision's future following the latest results, with a nice increase in the earnings per share forecasts in particular.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 16% to kr238per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on CellaVision, with the most bullish analyst valuing it at kr300 and the most bearish at kr165 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await CellaVision shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting CellaVision's growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that CellaVision is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around CellaVision's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that CellaVision will grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 forecasts for CellaVision going out to 2026, and you can see them free on our platform here.

Even so, be aware that CellaVision is showing 1 warning sign in our investment analysis , you should know about...

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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.