Analysts Are Updating Their Mentice AB (publ) (STO:MNTC) Estimates After Its Yearly Results

It's been a mediocre week for Mentice AB (publ) (STO:MNTC) shareholders, with the stock dropping 11% to kr22.80 in the week since its latest yearly results. It was a pretty bad result overall; while revenues were in line with expectations at kr292m, statutory losses exploded to kr0.72 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.

Check out our latest analysis for Mentice

Following the latest results, Mentice's four analysts are now forecasting revenues of kr343.7m in 2025. This would be a notable 18% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Mentice forecast to report a statutory profit of kr0.46 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr354.9m and earnings per share (EPS) of kr0.65 in 2025. 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.

Despite the cuts to forecast earnings, there was no real change to the kr41.75 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Mentice analyst has a price target of kr58.00 per share, while the most pessimistic values it at kr26.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

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 can infer from the latest estimates that forecasts expect a continuation of Mentice'shistorical trends, as the 18% annualised revenue growth to the end of 2025 is roughly in line with the 16% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 15% per year. It's clear that while Mentice's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Mentice. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Mentice analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Mentice 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.