SignUp Software AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models

The full-year results for SignUp Software AB (publ) (STO:SIGNUP) were released last week, making it a good time to revisit its performance. It looks like a pretty bad result, all things considered. Although revenues of kr245m were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 47% to hit kr0.36 per share. Following the result, the analyst has 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. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

View our latest analysis for SignUp Software

Taking into account the latest results, the consensus forecast from SignUp Software's single analyst is for revenues of kr311.4m in 2023, which would reflect a huge 27% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 242% to kr1.23. Yet prior to the latest earnings, the analyst had been anticipated revenues of kr317.0m and earnings per share (EPS) of kr1.70 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 17% to kr95.00, with the analyst clearly linking lower forecast earnings to the performance of the stock price.

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 clear from the latest estimates that SignUp Software's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 22% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect SignUp Software to grow faster than the wider industry.

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. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of SignUp Software's future valuation.

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 SignUp Software going out as far as 2025, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for SignUp Software that you need to take into consideration.

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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.