Paradox Interactive AB (publ) Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Paradox Interactive AB (publ) (STO:PDX) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to kr166 in the week after its latest third-quarter results. Revenues were kr395m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of kr0.88 were also better than expected, beating analyst predictions by 18%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the four analysts covering Paradox Interactive are now predicting revenues of kr2.59b in 2026. If met, this would reflect a huge 28% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 3.1% to kr6.23. In the lead-up to this report, the analysts had been modelling revenues of kr2.64b and earnings per share (EPS) of kr6.69 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Paradox Interactive

The consensus price target held steady at kr186, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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 kr215 and the most bearish at kr140 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Paradox Interactive shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Paradox Interactive's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 8.3% p.a. 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. 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Paradox Interactive going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Paradox Interactive that you need to take into consideration.

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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.