Results: Knowit AB (publ) Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a good week for Knowit AB (publ) (STO:KNOW) shareholders, because the company has just released its latest yearly results, and the shares gained 3.7% to kr147. The result was positive overall - although revenues of kr7.1b were in line with what the analysts predicted, Knowit surprised by delivering a statutory profit of kr8.74 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Knowit after the latest results.

See our latest analysis for Knowit

Following last week's earnings report, Knowit's twin analysts are forecasting 2024 revenues to be kr7.20b, approximately in line with the last 12 months. Per-share earnings are expected to bounce 25% to kr10.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr7.30b and earnings per share (EPS) of kr9.96 in 2024. So the consensus seems to have become somewhat more optimistic on Knowit's earnings potential following these results.

There's been no major changes to the consensus price target of kr149, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation.

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. It's pretty clear that there is an expectation that Knowit's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.1% growth on an annualised basis. This is compared to a historical growth rate of 21% 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 8.3% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Knowit.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Knowit following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Knowit's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Knowit that you should be aware of.

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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.