Stock Analysis

Earnings Miss: Biotage AB (publ) Missed EPS By 15% And Analysts Are Revising Their Forecasts

OM:BIOT
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Biotage AB (publ) (STO:BIOT) missed earnings with its latest third-quarter results, disappointing overly-optimistic forecasters. Biotage missed earnings this time around, with kr490m revenue coming in 3.4% below what the analysts had modelled. Statutory earnings per share (EPS) of kr0.55 also fell short of expectations by 15%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Biotage

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OM:BIOT Earnings and Revenue Growth October 26th 2024

Following the latest results, Biotage's three analysts are now forecasting revenues of kr2.41b in 2025. This would be a decent 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 38% to kr4.44. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr2.42b and earnings per share (EPS) of kr4.53 in 2025. 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.

The consensus price target held steady at kr191, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Biotage, with the most bullish analyst valuing it at kr212 and the most bearish at kr160 per share. This is a very narrow spread of estimates, implying either that Biotage is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Biotage's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this to the 11 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.9% per year. Factoring in the forecast slowdown in growth, it looks like Biotage is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at kr191, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Biotage analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Biotage Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Valuation is complex, but we're here to simplify it.

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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.