Ovzon AB (publ) (STO:OVZON) Consensus Forecasts Have Become A Little Darker Since Its Latest Report

As you might know, Ovzon AB (publ) (STO:OVZON) last week released its latest quarterly, and things did not turn out so great for shareholders. It was a pretty negative result overall, with revenues of kr67m missing analyst predictions by 6.9%. Worse, the business reported a statutory loss of kr0.14 per share, much larger than the analysts had forecast prior to the result. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Ovzon

Taking into account the latest results, the current consensus from Ovzon's twin analysts is for revenues of kr322.0m in 2024. This would reflect a credible 3.2% increase on its revenue over the past 12 months. Losses are forecast to balloon 92% to kr1.31 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of kr363.0m and losses of kr1.20 per share in 2024. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target lifted 65% to kr19.00, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term.

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 Ovzon's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.5% growth on an annualised basis. This is compared to a historical growth rate of 12% 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) 2.3% per year. So it's pretty clear that, while Ovzon's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. They also downgraded Ovzon's revenue estimates, but industry data suggests that it is expected to grow faster than the wider 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 2026, which can be seen for free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Ovzon (1 doesn't sit too well with us) 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.