Ework Group AB (publ) (STO:EWRK) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were in line with forecasts, at kr13b, although statutory earnings per share came in 14% below what analysts expected, at kr4.37 per share. Earnings are an important time for investors, as they can track a company’s performance, look at what top analysts are forecasting for next year, and see if there’s been a change in sentiment towards the company. We thought readers would find it interesting to see analysts’ latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the latest consensus from Ework Group’s sole analyst is for revenues of kr14.0b in 2020, which would reflect a meaningful 11% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to shoot up 28% to kr5.60. In the lead-up to this report, analysts had been modelling revenues of kr14.0b and earnings per share (EPS) of kr6.31 in 2020. Analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. It’s pretty clear that analysts expect Ework Group’s revenue growth will slow down substantially, with revenues next year expected to grow 11%, compared to a historical growth rate of 19% over the past five years. Juxtapose this against the other companies in the market with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.8% next year. Even after the forecast slowdown in growth, it seems obvious that analysts still thinkEwork Group will grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The stock price is largely unchanged in the week since results came out, suggesting that the earnings report did not have much of an impact on market perception of the business.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have analyst estimates for Ework Group going out as far as 2022, and you can see them free on our platform here.
It might also be worth considering whether Ework Group’s debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
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