Sensys Gatso Group AB (publ) Just Reported A Surprise Profit, And Analysts Lifted Their Estimates

The second-quarter results for Sensys Gatso Group AB (publ) (STO:SGG) were released last week, making it a good time to revisit its performance. It was overall a positive result, with revenues beating expectations by 9.6% to hit kr133m. Sensys Gatso Group also reported a statutory profit of kr0.32, which was a nice improvement from the loss that the analysts were predicting. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Sensys Gatso Group

Taking into account the latest results, the consensus forecast from Sensys Gatso Group's two analysts is for revenues of kr592.0m in 2023. This reflects a meaningful 18% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Sensys Gatso Group forecast to report a statutory profit of kr1.90 per share. In the lead-up to this report, the analysts had been modelling revenues of kr567.5m and earnings per share (EPS) of kr0.62 in 2023. So it seems there's been a definite increase in optimism about Sensys Gatso Group's future following the latest results, with a very substantial lift in the earnings per share forecasts in particular.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of kr102, suggesting that the forecast performance does not have a long term impact on the company's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Sensys Gatso Group's growth to accelerate, with the forecast 39% annualised growth to the end of 2023 ranking favourably alongside historical growth of 8.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 6.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sensys Gatso Group to grow faster than 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 Sensys Gatso Group following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider 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.

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 analyst estimates for Sensys Gatso Group going out as far as 2025, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Sensys Gatso Group that you need to be mindful 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.