Earnings Miss: NCAB Group AB (publ) Missed EPS By 30% And Analysts Are Revising Their Forecasts

As you might know, NCAB Group AB (publ) (STO:NCAB) last week released its latest quarterly, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with kr935m revenue coming in 7.4% lower than what the analystsexpected. Statutory earnings per share (EPS) of kr0.39 missed the mark badly, arriving some 30% below what was expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for NCAB Group

After the latest results, the four analysts covering NCAB Group are now predicting revenues of kr3.85b in 2024. If met, this would reflect a satisfactory 2.0% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be kr1.80, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of kr4.08b and earnings per share (EPS) of kr2.11 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The analysts made no major changes to their price target of kr85.75, suggesting the downgrades are not expected to have a long-term impact on NCAB Group's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on NCAB Group, with the most bullish analyst valuing it at kr90.00 and the most bearish at kr80.00 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting NCAB Group is an easy business to forecast or the the analysts are all using similar assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that NCAB Group's revenue growth is expected to slow, with the forecast 4.1% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than NCAB Group.

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. 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. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple NCAB Group analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with NCAB Group .

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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