OssDsign AB (publ) (STO:OSSD) Just Reported Earnings, And Analysts Cut Their Target Price

Last week, you might have seen that OssDsign AB (publ) (STO:OSSD) released its quarterly result to the market. The early response was not positive, with shares down 8.5% to kr7.87 in the past week. Revenues were in line with expectations, at kr30m, while statutory losses ballooned to kr0.20 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on OssDsign after the latest results.

See our latest analysis for OssDsign

Taking into account the latest results, OssDsign's four analysts currently expect revenues in 2024 to be kr124.1m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 52% to kr0.56. Before this latest report, the consensus had been expecting revenues of kr126.6m and kr0.57 per share in losses.

As a result, it's unexpected to see that the consensus price target fell 6.3% to kr12.33, with the analysts seemingly becoming more concerned about ongoing losses, despite making no major changes to their forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic OssDsign analyst has a price target of kr14.00 per share, while the most pessimistic values it at kr11.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the OssDsign's past performance and to peers in the same industry. It's pretty clear that there is an expectation that OssDsign's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.0% growth on an annualised basis. This is compared to a historical growth rate of 43% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than OssDsign.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that OssDsign's revenue is expected to perform worse than 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.

With that in mind, we wouldn't be too quick to come to a conclusion on OssDsign. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple OssDsign analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 3 warning signs for OssDsign that you need to be mindful 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.