Hexagon AB (publ) Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Hexagon AB (publ) (STO:HEXA B) last week released its latest quarterly, and things did not turn out so great for shareholders. Hexagon missed analyst forecasts, with revenues of €1.3b and statutory earnings per share (EPS) of €0.088, falling short by 2.6% and 5.8% respectively. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Hexagon

Following the latest results, Hexagon's 16 analysts are now forecasting revenues of €5.70b in 2024. This would be a reasonable 4.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 31% to €0.42. Before this earnings report, the analysts had been forecasting revenues of €5.75b and earnings per share (EPS) of €0.42 in 2024. 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.

The analysts reconfirmed their price target of kr123, showing that the business is executing well and in line with expectations. 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. The most optimistic Hexagon analyst has a price target of kr165 per share, while the most pessimistic values it at kr80.14. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Hexagon's revenue growth is expected to slow, with the forecast 6.1% annualised growth rate until the end of 2024 being well below the historical 9.0% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 8.1% annually. Factoring in the forecast slowdown in growth, it seems obvious that Hexagon is also expected to grow slower than other industry participants.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Hexagon's revenue is expected to perform worse than the wider industry. The consensus price target held steady at kr123, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Hexagon going out to 2026, and you can see them free on our platform here.

You can also view our analysis of Hexagon's balance sheet, and whether we think Hexagon is carrying too much debt, for free on our platform here.

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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.