Earnings Beat: Swedish Orphan Biovitrum AB (publ) Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, Swedish Orphan Biovitrum AB (publ) (STO:SOBI) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Swedish Orphan Biovitrum beat earnings, with revenues hitting kr5.4b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 11%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Swedish Orphan Biovitrum after the latest results.

View our latest analysis for Swedish Orphan Biovitrum

Following the latest results, Swedish Orphan Biovitrum's eleven analysts are now forecasting revenues of kr24.9b in 2024. This would be an okay 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 58% to kr9.89. Before this earnings report, the analysts had been forecasting revenues of kr24.6b and earnings per share (EPS) of kr10.26 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at kr328, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Swedish Orphan Biovitrum at kr370 per share, while the most bearish prices it at kr250. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Swedish Orphan Biovitrum shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Swedish Orphan Biovitrum'shistorical trends, as the 11% annualised revenue growth to the end of 2024 is roughly in line with the 12% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 17% per year. So it's pretty clear that Swedish Orphan Biovitrum is expected to grow slower than similar companies in the same 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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Swedish Orphan Biovitrum's revenue is expected to perform worse 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.

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 estimates - from multiple Swedish Orphan Biovitrum analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for Swedish Orphan Biovitrum you should know about.

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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.

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