Karnov Group AB (publ) (STO:KAR) shareholders are probably feeling a little disappointed, since its shares fell 6.7% to kr49.10 in the week after its latest yearly results. It looks like a credible result overall - although revenues of kr771m were in line with what the analysts predicted, Karnov Group surprised by delivering a statutory profit of kr1.02 per share, a notable 13% above expectations. 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.
Following the latest results, Karnov Group's two analysts are now forecasting revenues of kr854.5m in 2021. This would be a notable 11% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 2.6% to kr0.99 in the same period. In the lead-up to this report, the analysts had been modelling revenues of kr835.9m and earnings per share (EPS) of kr0.98 in 2021. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.
Even though revenue forecasts increased, there was no change to the consensus price target of kr63.50, suggesting the analysts are focused on earnings as the driver of value creation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 11%, in line with its 12% annual growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 27% per year. So although Karnov Group is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to 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 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 1 warning sign for Karnov Group you should be aware of.
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