Earnings Miss: Genovis AB (publ.) Missed EPS By 71% And Analysts Are Revising Their Forecasts

As you might know, Genovis AB (publ.) (STO:GENO) last week released its latest second-quarter, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at kr29m, statutory earnings missed forecasts by an incredible 71%, coming in at just kr0.03 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Genovis AB (publ.)

Following last week's earnings report, Genovis AB (publ.)'s three analysts are forecasting 2024 revenues to be kr128.6m, approximately in line with the last 12 months. Per-share earnings are expected to leap 47% to kr0.39. In the lead-up to this report, the analysts had been modelling revenues of kr151.9m and earnings per share (EPS) of kr0.72 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a pretty serious reduction to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 17% to kr43.00. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Genovis AB (publ.) at kr52.00 per share, while the most bearish prices it at kr34.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 pretty clear that there is an expectation that Genovis AB (publ.)'s revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.5% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.3% per year. Factoring in the forecast slowdown in growth, it seems obvious that Genovis AB (publ.) is also expected to grow slower than other industry participants.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Genovis AB (publ.)'s future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Genovis AB (publ.). Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Genovis AB (publ.) analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Genovis AB (publ.) , and understanding these should be part of your investment process.

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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.