Earnings Miss: Arise AB (publ) Missed EPS And Analysts Are Revising Their Forecasts

Last week, you might have seen that Arise AB (publ) (STO:ARISE) released its first-quarter result to the market. The early response was not positive, with shares down 6.3% to kr34.45 in the past week. Revenues beat expectations by 14% to hit kr85m, although earnings fell badly short, with Arise reported a statutory loss of kr0.39 per share even though the analysts had been forecasting a profit. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus from Arise's three analysts is for revenues of kr616.0m in 2025. This would reflect a huge 39% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 55% to kr4.39. Before this earnings report, the analysts had been forecasting revenues of kr675.4m and earnings per share (EPS) of kr6.04 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

View our latest analysis for Arise

The analysts made no major changes to their price target of kr76.50, suggesting the downgrades are not expected to have a long-term impact on Arise's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Arise at kr77.50 per share, while the most bearish prices it at kr75.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Arise's growth to accelerate, with the forecast 56% annualised growth to the end of 2025 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 1.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Arise is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Arise. They also downgraded Arise's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at kr76.50, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Arise going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Arise that you need to take into consideration.

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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.