Analysts Are Updating Their Castellum AB (publ) (STO:CAST) Estimates After Its First-Quarter Results

Castellum AB (publ) (STO:CAST) shareholders are probably feeling a little disappointed, since its shares fell 4.3% to kr112 in the week after its latest quarterly results. Castellum's revenues suffered a miss, falling 3.2% short of forecasts, at kr2.4b. Statutory earnings per share (EPS) however performed much better, reaching break-even. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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After the latest results, the consensus from Castellum's eight analysts is for revenues of kr9.66b in 2025, which would reflect a small 3.5% decline in revenue compared to the last year of performance. Per-share earnings are expected to surge 30% to kr6.71. Before this earnings report, the analysts had been forecasting revenues of kr9.80b and earnings per share (EPS) of kr7.83 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

View our latest analysis for Castellum

It might be a surprise to learn that the consensus price target was broadly unchanged at kr116, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Castellum analyst has a price target of kr150 per share, while the most pessimistic values it at kr95.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 4.6% annualised decline to the end of 2025. That is a notable change from historical growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.9% annually for the foreseeable future. It's pretty clear that Castellum's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Castellum. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at kr116, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Castellum. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Castellum analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Castellum (1 doesn't sit too well with us!) that 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.