Earnings Miss: Ependion AB Missed EPS By 12% And Analysts Are Revising Their Forecasts

There's been a notable change in appetite for Ependion AB (STO:EPEN) shares in the week since its full-year report, with the stock down 13% to kr97.40. It was not a great result overall. While revenues of kr2.5b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 12% to hit kr6.93 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Ependion

Taking into account the latest results, Ependion's twin analysts currently expect revenues in 2024 to be kr2.47b, approximately in line with the last 12 months. Statutory earnings per share are predicted to bounce 25% to kr8.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr2.56b and earnings per share (EPS) of kr9.30 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the kr137 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Ependion's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 0.01% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.1% per year. Factoring in the forecast slowdown in growth, it seems obvious that Ependion is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ependion. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at kr137, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Ependion. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Ependion going out as far as 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Ependion that you should be aware 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.