NCAB Group AB (publ) (STO:NCAB) Just Reported And Analysts Have Been Cutting Their Estimates

It's been a good week for NCAB Group AB (publ) (STO:NCAB) shareholders, because the company has just released its latest annual results, and the shares gained 4.6% to kr73.20. It looks like the results were a bit of a negative overall. While revenues of kr4.1b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.2% to hit kr2.15 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for NCAB Group

Taking into account the latest results, NCAB Group's three analysts currently expect revenues in 2024 to be kr4.07b, approximately in line with the last 12 months. Per-share earnings are expected to increase 2.0% to kr2.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr4.45b and earnings per share (EPS) of kr2.39 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the kr73.67 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 NCAB Group, with the most bullish analyst valuing it at kr77.00 and the most bearish at kr71.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the NCAB Group's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.5% by the end of 2024. This indicates a significant reduction from annual growth of 24% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 7.8% per year. It's pretty clear that NCAB Group'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 NCAB Group. 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 kr73.67, 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 NCAB Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for NCAB Group going out to 2026, and you can see them free on our platform here..

You can also view our analysis of NCAB Group's balance sheet, and whether we think NCAB Group 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.