Acast AB (publ) (STO:ACAST) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

Investors in Acast AB (publ) (STO:ACAST) had a good week, as its shares rose 6.5% to close at kr13.84 following the release of its first-quarter results. Revenues were kr298m, with Acast reporting some 6.2% below analyst expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analyst is expecting for next year.

View our latest analysis for Acast

Following the latest results, Acast's sole analyst are now forecasting revenues of kr1.54b in 2022. This would be a substantial 37% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 33% to kr1.21. Before this latest report, the consensus had been expecting revenues of kr1.64b and kr1.17 per share in losses. Overall it looks as though the analyst are negative in this update. Although sales forecasts held steady, the consensus also made a moderate increase in to its losses per share forecasts.

The average price target fell 13% to kr33.00, implicitly signalling that lower earnings per share are a leading indicator for Acast's valuation.

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. We would highlight that Acast's revenue growth is expected to slow, with the forecast 52% annualised growth rate until the end of 2022 being well below the historical 67% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 20% annually. So it's pretty clear that, while Acast's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Acast. They also downgraded their revenue estimates, although industry data suggests that Acast's revenues are expected to grow faster than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2023, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Acast 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.