Ependion AB (STO:EPEN) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Last week, you might have seen that Ependion AB (STO:EPEN) released its second-quarter result to the market. The early response was not positive, with shares down 3.4% to kr119 in the past week. Results look mixed - while revenue fell marginally short of analyst estimates at kr588m, statutory earnings were in line with expectations, at kr6.93 per share. 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. 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 Ependion

Following last week's earnings report, Ependion's two analysts are forecasting 2024 revenues to be kr2.37b, approximately in line with the last 12 months. Per-share earnings are expected to increase 8.3% to kr6.63. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr2.46b and earnings per share (EPS) of kr7.20 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.

The analysts made no major changes to their price target of kr144, suggesting the downgrades are not expected to have a long-term impact on Ependion's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 2.4% by the end of 2024. This indicates a significant reduction from annual growth of 13% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.0% annually for the foreseeable future. It's pretty clear that Ependion's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ependion. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com