Results: Surgical Science Sweden AB (publ) Beat Earnings Expectations And Analysts Now Have New Forecasts

There's been a notable change in appetite for Surgical Science Sweden AB (publ) (STO:SUS) shares in the week since its annual report, with the stock down 15% to kr155. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at kr883m, statutory earnings beat expectations by a notable 20%, coming in at kr4.59 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Surgical Science Sweden

Taking into account the latest results, the most recent consensus for Surgical Science Sweden from six analysts is for revenues of kr1.01b in 2024. If met, it would imply a notable 14% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to shrink 2.3% to kr4.48 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr1.08b and earnings per share (EPS) of kr4.83 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of kr230, suggesting the downgrades are not expected to have a long-term impact on Surgical Science Sweden's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Surgical Science Sweden at kr260 per share, while the most bearish prices it at kr200. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Surgical Science Sweden's past performance and to peers in the same industry. We would highlight that Surgical Science Sweden's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 54% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% annually. Factoring in the forecast slowdown in growth, it looks like Surgical Science Sweden 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 Surgical Science Sweden. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Surgical Science Sweden analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Surgical Science Sweden's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.