Paradox Interactive AB (publ) Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Paradox Interactive AB (publ) (STO:PDX) just released its latest quarterly report and things are not looking great. Unfortunately, Paradox Interactive delivered a serious earnings miss. Revenues of kr459m were 12% below expectations, and statutory earnings per share of kr1.04 missed estimates by 29%. 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 Paradox Interactive after the latest results.

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Taking into account the latest results, the current consensus from Paradox Interactive's five analysts is for revenues of kr2.40b in 2025. This would reflect a meaningful 16% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to dive 24% to kr4.79 in the same period. In the lead-up to this report, the analysts had been modelling revenues of kr2.50b and earnings per share (EPS) of kr5.65 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

See our latest analysis for Paradox Interactive

The analysts made no major changes to their price target of kr190, suggesting the downgrades are not expected to have a long-term impact on Paradox Interactive's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Paradox Interactive, with the most bullish analyst valuing it at kr215 and the most bearish at kr150 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. The analysts are definitely expecting Paradox Interactive's growth to accelerate, with the forecast 35% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Paradox Interactive to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Paradox Interactive. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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.

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 Paradox Interactive going out to 2027, and you can see them free on our platform here..

You can also see our analysis of Paradox Interactive's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.