Earnings Beat: BioArctic AB (publ) (STO:BIOA B) Just Beat Analyst Forecasts, And Analysts Have Been Lifting Their Forecasts

It's been a good week for BioArctic AB (publ) (STO:BIOA B) shareholders, because the company has just released its latest annual results, and the shares gained 5.7% to kr232. Revenue hit kr257m in line with forecasts, although the company reported a statutory loss per share of kr2.00 that was somewhat smaller than the analysts 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on BioArctic after the latest results.

Check out our latest analysis for BioArctic

Following the latest results, BioArctic's six analysts are now forecasting revenues of kr1.99b in 2025. This would be a major 674% improvement in revenue compared to the last 12 months. BioArctic is also expected to turn profitable, with statutory earnings of kr10.81 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr1.34b and earnings per share (EPS) of kr5.51 in 2025. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

Despite these upgrades,the analysts have not made any major changes to their price target of kr333, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 BioArctic, with the most bullish analyst valuing it at kr350 and the most bearish at kr310 per share. This is a very narrow spread of estimates, implying either that BioArctic is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that BioArctic's rate of growth is expected to accelerate meaningfully, with the forecast 7x annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 29% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that BioArctic is expected to grow much faster than its industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around BioArctic's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for BioArctic going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for BioArctic 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.