Earnings Update: Here's Why Analysts Just Lifted Their AddLife AB (publ) (STO:ALIF B) Price Target To kr155

Shareholders of AddLife AB (publ) (STO:ALIF B) will be pleased this week, given that the stock price is up 15% to kr154 following its latest second-quarter results. The result was positive overall - although revenues of kr2.6b were in line with what the analysts predicted, AddLife surprised by delivering a statutory profit of kr0.60 per share, modestly greater than expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for AddLife

Taking into account the latest results, the consensus forecast from AddLife's dual analysts is for revenues of kr10.2b in 2024. This reflects an okay 2.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 132% to kr2.25. Before this earnings report, the analysts had been forecasting revenues of kr10.1b and earnings per share (EPS) of kr1.97 in 2024. Although the revenue estimates have not really changed, we can see there's been a nice gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target rose 8.8% to kr155, suggesting that higher earnings estimates flow through to the stock's valuation as well.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that AddLife's revenue growth is expected to slow, with the forecast 4.5% annualised growth rate until the end of 2024 being well below the historical 22% 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 9.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than AddLife.

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.

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 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for AddLife (1 is concerning!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com