Earnings Update: Hexagon AB (publ) (STO:HEXA B) Just Reported Its Annual Results And Analysts Are Updating Their Forecasts

Hexagon AB (publ) (STO:HEXA B) shareholders are probably feeling a little disappointed, since its shares fell 4.1% to kr109 in the week after its latest full-year results. Hexagon reported in line with analyst predictions, delivering revenues of €5.4b and statutory earnings per share of €0.38, suggesting the business is executing well and in line with its plan. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hexagon after the latest results.

After the latest results, the 16 analysts covering Hexagon are now predicting revenues of €5.75b in 2025. If met, this would reflect a reasonable 6.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 14% to €0.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of €5.76b and earnings per share (EPS) of €0.44 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

See our latest analysis for Hexagon

There were no changes to revenue or earnings estimates or the price target of kr126, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Hexagon, with the most bullish analyst valuing it at kr156 and the most bearish at kr98.33 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hexagon's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Hexagon's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.5% growth on an annualised basis. This is compared to a historical growth rate of 9.1% over the past five years. Compare this to the 39 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.6% per year. Factoring in the forecast slowdown in growth, it looks like Hexagon is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Hexagon. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Hexagon analysts - going out to 2027, and you can see them free on our platform here.

You can also see whether Hexagon is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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.