Proact IT Group AB (publ) Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a good week for Proact IT Group AB (publ) (STO:PACT) shareholders, because the company has just released its latest quarterly results, and the shares gained 9.5% to kr113. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at kr1.2b, statutory earnings beat expectations by a notable 52%, coming in at kr2.22 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Proact IT Group

Taking into account the latest results, the current consensus from Proact IT Group's twin analysts is for revenues of kr5.17b in 2024. This would reflect an okay 7.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 19% to kr8.93. In the lead-up to this report, the analysts had been modelling revenues of kr5.08b and earnings per share (EPS) of kr7.48 in 2024. Although the revenue estimates have not really changed, we can see there's been a solid gain to earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at kr115, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.

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. We can infer from the latest estimates that forecasts expect a continuation of Proact IT Group'shistorical trends, as the 9.9% annualised revenue growth to the end of 2024 is roughly in line with the 9.0% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 8.6% annually. It's clear that while Proact IT Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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 Proact IT Group following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Proact IT Group that you need to be mindful 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.