Orexo AB (publ) (STO:ORX) Just Reported Earnings, And Analysts Cut Their Target Price

The analyst might have been a bit too bullish on Orexo AB (publ) (STO:ORX), given that the company fell short of expectations when it released its quarterly results last week. It was a pretty negative result overall, with revenues of kr154m missing analyst predictions by 3.1%. Worse, the business reported a statutory loss of kr1.04 per share, much larger than the analyst had forecast prior to the result. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Orexo after the latest results.

Check out our latest analysis for Orexo

Taking into account the latest results, the current consensus, from the solitary analyst covering Orexo, is for revenues of kr595.1m in 2024. This implies a small 3.3% reduction in Orexo's revenue over the past 12 months. Losses are expected to hold steady at around kr2.82. Before this latest report, the consensus had been expecting revenues of kr611.0m and kr1.95 per share in losses. While this year's revenue estimates dropped there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

The average price target fell 10% to kr21.50, implicitly signalling that lower earnings per share are a leading indicator for Orexo's valuation.

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. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2024, roughly in line with the historical decline of 7.0% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 39% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect Orexo to suffer worse than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Orexo. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Orexo going out as far as 2026, and you can see them free on our platform here.

Even so, be aware that Orexo is showing 2 warning signs in our investment analysis , you should know about...

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