Embracer Group AB (publ) (STO:EMBRAC B) Analysts Are Cutting Their Estimates: Here's What You Need To Know

Embracer Group AB (publ) (STO:EMBRAC B) just released its quarterly report and things are looking bullish. Results overall were solid, with revenues arriving 3.0% better than analyst forecasts at kr3.9b. Higher revenues also resulted in substantially lower statutory losses which, at kr0.10 per share, were 3.0% smaller than the analysts expected. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the six analysts covering Embracer Group provided consensus estimates of kr16.6b revenue in 2026, which would reflect an uneasy 17% decline over the past 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -kr2.72 per share in 2026. Yet prior to the latest earnings, the analysts had been forecasting revenues of kr17.5b and losses of kr1.53 per share in 2026. So it's pretty clear the analysts have mixed opinions on Embracer Group after this update; revenues were downgraded and per-share losses expected to increase.

Check out our latest analysis for Embracer Group

The average price target was broadly unchanged at kr113, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. The most optimistic Embracer Group analyst has a price target of kr140 per share, while the most pessimistic values it at kr81.00. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Embracer Group's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 31% by the end of 2026. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Embracer Group is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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. At Simply Wall St, we have a full range of analyst estimates for Embracer Group going out to 2028, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Embracer Group (including 1 which is potentially serious) .

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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.