Pierce Group AB (publ) Just Missed EPS By 9.4%: Here's What Analysts Think Will Happen Next

It's been a mediocre week for Pierce Group AB (publ) (STO:PIERCE) shareholders, with the stock dropping 14% to kr37.85 in the week since its latest yearly results. Revenues of kr1.6b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr0.68, missing estimates by 9.4%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Pierce Group

Taking into account the latest results, the most recent consensus for Pierce Group from two analysts is for revenues of kr1.83b in 2022 which, if met, would be a solid 15% increase on its sales over the past 12 months. Statutory earnings per share are predicted to bounce 117% to kr1.42. In the lead-up to this report, the analysts had been modelling revenues of kr1.84b and earnings per share (EPS) of kr1.67 in 2022. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.

It might be a surprise to learn that the consensus price target fell 31% to kr43.00, with the analysts clearly linking lower forecast earnings to the performance of the stock price.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Pierce Group'shistorical trends, as the 15% annualised revenue growth to the end of 2022 is roughly in line with the 16% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So although Pierce Group is expected to maintain its revenue growth rate, it's only growing at about the rate of 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 Pierce Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Pierce Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Pierce Group. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Pierce Group going out as far as 2024, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Pierce Group (1 is concerning!) that you need to take into consideration.

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.