Cint Group AB (publ) (STO:CINT) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

There's been a major selloff in Cint Group AB (publ) (STO:CINT) shares in the week since it released its quarterly report, with the stock down 28% to kr11.50. Results look to have been somewhat negative - revenue fell 7.3% short of analyst estimates at €60m, although statutory losses were somewhat better. The per-share loss was €0.04, 20% smaller than the analysts were expecting prior to the result. 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.

See our latest analysis for Cint Group

Taking into account the latest results, the current consensus, from the three analysts covering Cint Group, is for revenues of €279.2m in 2023, which would reflect a noticeable 2.9% reduction in Cint Group's sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 94% to €0.095. Before this latest report, the consensus had been expecting revenues of €295.1m and €0.071 per share in losses. So it's pretty clear the analysts have mixed opinions on Cint Group after this update; revenues were downgraded and per-share losses expected to increase.

The consensus price target fell 25% to kr17.26, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Cint Group, with the most bullish analyst valuing it at kr24.90 and the most bearish at kr9.96 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 3.9% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 62% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. It's pretty clear that Cint Group's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Cint Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Cint Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Cint Group going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Cint Group (of which 1 makes us a bit uncomfortable!) 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.