Stock Analysis

RVRC Holding AB (publ) Just Missed EPS By 6.6%: Here's What Analysts Think Will Happen Next

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It's been a sad week for RVRC Holding AB (publ) (STO:RVRC), who've watched their investment drop 15% to kr51.40 in the week since the company reported its third-quarter result. It looks like the results were a bit of a negative overall. While revenues of kr478m were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 6.6% to hit kr0.71 per share. 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.

Check out our latest analysis for RVRC Holding

OM:RVRC Earnings and Revenue Growth May 10th 2024

Taking into account the latest results, the current consensus from RVRC Holding's three analysts is for revenues of kr2.16b in 2025. This would reflect a substantial 20% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 18% to kr3.15. Before this earnings report, the analysts had been forecasting revenues of kr2.17b and earnings per share (EPS) of kr3.50 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The average price target fell 8.0% to kr69.00, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 RVRC Holding at kr72.00 per share, while the most bearish prices it at kr65.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the RVRC Holding's past performance and to peers in the same industry. It's pretty clear that there is an expectation that RVRC Holding's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% annually. Even after the forecast slowdown in growth, it seems obvious that RVRC Holding is also expected to grow faster 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 RVRC Holding. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of RVRC Holding's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for RVRC Holding going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - RVRC Holding has 1 warning sign we think you should be aware of.

Valuation is complex, but we're helping make it simple.

Find out whether RVRC Holding is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.