Lyko Group AB (publ) Surprised Analysts With A Profit, And Analysts Boosted Their EPS Forecasts

The investors in Lyko Group AB (publ)'s (STO:LYKO A) will be rubbing their hands together with glee today, after the share price leapt 38% to kr127 in the week following its annual results. Although revenues of kr3.6b were in line with analyst expectations, Lyko Group surprised on the earnings front, with an unexpected (statutory) profit of kr1.37 per share a nice improvement on the losses that the analystsforecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Lyko Group

After the latest results, the five analysts covering Lyko Group are now predicting revenues of kr4.13b in 2025. If met, this would reflect a solid 16% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 283% to kr5.25. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr4.07b and earnings per share (EPS) of kr2.83 in 2025. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the considerable lift to earnings per share expectations following these results.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 9.8% to kr130. 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. The most optimistic Lyko Group analyst has a price target of kr160 per share, while the most pessimistic values it at kr95.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. We would highlight that Lyko Group's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2025 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% annually. So it's pretty clear that, while Lyko Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Lyko Group's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 forecasts for Lyko Group going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Lyko Group (1 shouldn't be ignored!) that you need to take into consideration.

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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.