Truecaller AB (publ) Just Missed EPS By 6.5%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Truecaller AB (publ) (STO:TRUE B), given that the company fell short of expectations when it released its full-year results last week. Truecaller missed analyst forecasts, with revenues of kr1.8b and statutory earnings per share (EPS) of kr1.43, falling short by 2.9% and 6.5% respectively. 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. 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 Truecaller

Taking into account the latest results, the current consensus from Truecaller's six analysts is for revenues of kr2.12b in 2023, which would reflect a solid 19% increase on its sales over the past 12 months. Per-share earnings are expected to ascend 17% to kr1.69. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr2.42b and earnings per share (EPS) of kr1.97 in 2023. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

The analysts made no major changes to their price target of kr78.43, suggesting the downgrades are not expected to have a long-term impact on Truecaller's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Truecaller, with the most bullish analyst valuing it at kr110 and the most bearish at kr48.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's pretty clear that there is an expectation that Truecaller's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 54% over the past three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% annually. So it's pretty clear that, while Truecaller's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at kr78.43, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Truecaller analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Truecaller is showing 1 warning sign in our investment analysis , you should know about...

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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.