Earnings Miss: Here's What Paradox Interactive AB (publ) (STO:PDX) Analysts Are Forecasting For Next Year

The analysts might have been a bit too bullish on Paradox Interactive AB (publ) (STO:PDX), given that the company fell short of expectations when it released its quarterly results last week. Paradox Interactive missed analyst forecasts, with revenues of kr434m and statutory earnings per share (EPS) of kr1.13, falling short by 6.5% and 5.4% respectively. 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.

Check out our latest analysis for Paradox Interactive

After the latest results, the six analysts covering Paradox Interactive are now predicting revenues of kr2.77b in 2025. If met, this would reflect a meaningful 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 87% to kr6.60. In the lead-up to this report, the analysts had been modelling revenues of kr2.79b and earnings per share (EPS) of kr6.57 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of kr212, suggesting that the company has met expectations in its recent result. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Paradox Interactive, with the most bullish analyst valuing it at kr280 and the most bearish at kr140 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Paradox Interactive's past performance and to peers in the same industry. We would highlight that Paradox Interactive's revenue growth is expected to slow, with the forecast 9.1% annualised growth rate until the end of 2025 being well below the historical 13% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.9% annually. Even after the forecast slowdown in growth, it seems obvious that Paradox Interactive is also expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Paradox Interactive. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Paradox Interactive analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Paradox Interactive that you need to be mindful 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.