AddLife AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models

AddLife AB (publ) (STO:ALIF B) shareholders are probably feeling a little disappointed, since its shares fell 6.3% to kr109 in the week after its latest annual results. Revenues were in line with forecasts, at kr9.7b, although statutory earnings per share came in 18% below what the analysts expected, at kr1.56 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for AddLife

Following the latest results, AddLife's twin analysts are now forecasting revenues of kr10.2b in 2024. This would be an okay 4.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 73% to kr2.70. In the lead-up to this report, the analysts had been modelling revenues of kr10.1b and earnings per share (EPS) of kr2.61 in 2024. So the consensus seems to have become somewhat more optimistic on AddLife's earnings potential following these results.

The consensus price target rose 19% to kr132, suggesting that higher earnings estimates flow through to the stock's valuation as well.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that AddLife's revenue growth is expected to slow, with the forecast 4.8% annualised growth rate until the end of 2024 being well below the historical 26% 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 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that AddLife is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards AddLife following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that AddLife's revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for AddLife (1 is significant!) that you should be aware 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.