Results: NOTE AB (publ) Exceeded Expectations And The Consensus Has Updated Its Estimates

It's been a good week for NOTE AB (publ) (STO:NOTE) shareholders, because the company has just released its latest second-quarter results, and the shares gained 9.4% to kr193. Revenues were kr980m, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of kr2.65 were also better than expected, beating analyst predictions by 12%. 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.

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Following the latest results, NOTE's two analysts are now forecasting revenues of kr3.97b in 2025. This would be a reasonable 4.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 10% to kr9.96. Before this earnings report, the analysts had been forecasting revenues of kr3.95b and earnings per share (EPS) of kr9.57 in 2025. So the consensus seems to have become somewhat more optimistic on NOTE's earnings potential following these results.

Check out our latest analysis for NOTE

The consensus price target rose 10% to kr169, suggesting that higher earnings estimates flow through to the stock's valuation as well.

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. It's pretty clear that there is an expectation that NOTE's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.1% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 6.6% annually. Factoring in the forecast slowdown in growth, it looks like NOTE is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards NOTE following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 2027, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for NOTE 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.