Earnings Update: Here's Why Analysts Just Lifted Their Ovzon AB (publ) (STO:OVZON) Price Target To kr22.50

Investors in Ovzon AB (publ) (STO:OVZON) had a good week, as its shares rose 5.2% to close at kr28.10 following the release of its quarterly results. Revenues of kr90m missed forecasts by 13%, but at least statutory losses were much smaller than expected, with per-share losses of kr0.03 coming in 90% smaller than what the analysts had forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ovzon after the latest results.

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Taking into account the latest results, the consensus forecast from Ovzon's twin analysts is for revenues of kr501.0m in 2025. This reflects a substantial 37% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Ovzon forecast to report a statutory profit of kr0.38 per share. Before this latest report, the consensus had been expecting revenues of kr519.6m and kr0.17 per share in losses. Although the analysts have reduced their revenue expectations, they now expect the business to reach profitability sooner than previously assumed, which makes it look as though there's been a pretty serious improvement in sentiment following the latest results.

View our latest analysis for Ovzon

The average price target increased 29% to kr22.50, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue.

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 clear from the latest estimates that Ovzon's rate of growth is expected to accelerate meaningfully, with the forecast 51% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 14% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue shrink 0.4% per year. So it's clear with the acceleration in growth, Ovzon is expected to grow meaningfully faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Ovzon to become profitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates that is expected to perform better than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Ovzon. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Ovzon going out as far as 2027, and you can see them free on our platform here.

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