Earnings Miss: Micro Systemation AB (publ) Missed EPS By 32% And Analysts Are Revising Their Forecasts

The analyst might have been a bit too bullish on Micro Systemation AB (publ) (STO:MSAB B), given that the company fell short of expectations when it released its yearly results last week. Results showed a clear earnings miss, with kr417m revenue coming in 2.4% lower than what the analystexpected. Statutory earnings per share (EPS) of kr1.62 missed the mark badly, arriving some 32% below what was expected. The analyst 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Micro Systemation after the latest results.

See our latest analysis for Micro Systemation

Taking into account the latest results, the consensus forecast from Micro Systemation's one analyst is for revenues of kr452.0m in 2024. This reflects a decent 8.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 80% to kr2.92. Yet prior to the latest earnings, the analyst had been anticipated revenues of kr481.0m and earnings per share (EPS) of kr3.17 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

What's most unexpected is that the consensus price target rose 11% to kr84.00, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analyst is definitely expecting Micro Systemation's growth to accelerate, with the forecast 8.4% annualised growth to the end of 2024 ranking favourably alongside historical growth of 6.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. So it's clear that despite the acceleration in growth, Micro Systemation is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Before you take the next step you should know about the 1 warning sign for Micro Systemation that we have uncovered.

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.