Sleep Cycle AB (publ) (STO:SLEEP) Just Reported, And Analysts Assigned A kr71.50 Price Target

Shareholders might have noticed that Sleep Cycle AB (publ) (STO:SLEEP) filed its yearly result this time last week. The early response was not positive, with shares down 2.7% to kr53.50 in the past week. The result was positive overall - although revenues of kr183m were in line with what the analysts predicted, Sleep Cycle surprised by delivering a statutory profit of kr0.42 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Sleep Cycle

Following the latest results, Sleep Cycle's twin analysts are now forecasting revenues of kr226.6m in 2022. This would be a huge 24% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 279% to kr1.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr231.0m and earnings per share (EPS) of kr1.75 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The average price target fell 7.7% to kr71.50, with reduced earnings forecasts clearly tied to a lower valuation estimate.

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. We can infer from the latest estimates that forecasts expect a continuation of Sleep Cycle'shistorical trends, as the 24% annualised revenue growth to the end of 2022 is roughly in line with the 20% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 26% annually. It's clear that while Sleep Cycle'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 to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sleep Cycle's future valuation.

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 2024, which can be seen for free on our platform here.

Plus, you should also learn about the 3 warning signs we've spotted with Sleep Cycle .

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.