Surgical Science Sweden AB (publ) Just Missed EPS By 22%: Here's What Analysts Think Will Happen Next

Surgical Science Sweden AB (publ) (STO:SUS) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with kr212m revenue coming in 3.1% lower than what the analystsexpected. Statutory earnings per share (EPS) of kr0.56 missed the mark badly, arriving some 22% below what was expected. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Surgical Science Sweden

Taking into account the latest results, the consensus forecast from Surgical Science Sweden's six analysts is for revenues of kr912.7m in 2024. This reflects a solid 8.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 20% to kr3.08 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr928.9m and earnings per share (EPS) of kr3.47 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

The consensus price target held steady at kr192, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Surgical Science Sweden at kr225 per share, while the most bearish prices it at kr140. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Surgical Science Sweden's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 47% over the past five years. Compare this to the 61 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 18% per year. 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. 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.