Revenue Beat: Rottneros AB (publ) Beat Analyst Estimates By 8.2%

It's been a good week for Rottneros AB (publ) (STO:RROS) shareholders, because the company has just released its latest first-quarter results, and the shares gained 5.7% to kr13.30. Results overall were respectable, with statutory earnings of kr1.30 per share roughly in line with what the analysts had forecast. Revenues of kr684m came in 8.2% ahead of analyst predictions. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Rottneros after the latest results.

Check out our latest analysis for Rottneros

Taking into account the latest results, the current consensus from Rottneros' two analysts is for revenues of kr2.60b in 2022, which would reflect an okay 7.6% increase on its sales over the past 12 months. Statutory earnings per share are expected to plunge 21% to kr1.58 in the same period. Before this earnings report, the analysts had been forecasting revenues of kr2.30b and earnings per share (EPS) of kr1.53 in 2022. Sentiment certainly seems to have improved after the latest results, with a decent improvement in revenue and a slight bump in earnings per share estimates.

Despite these upgrades,the analysts have not made any major changes to their price target of kr12.10, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Rottneros' rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 3.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.09% per year. So it's clear with the acceleration in growth, Rottneros is expected to grow meaningfully faster than 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 Rottneros' earnings potential next year. On the plus side, they also lifted their revenue estimates, and the company is expected to perform better than 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 analyst estimates for Rottneros going out as far as 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Rottneros has 3 warning signs (and 1 which is significant) we think 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.