Earnings are right: Surgical Science Sweden AB (publ) simply beat analyst forecasts, and analysts have updated their models

Surgical Sciences Sweden AB (publ) (STO:SUS) shareholders are probably feeling a little disappointed, as shares fell 4.1% to kr145 in the week after the latest annual results. Revenues of kr883 million were slightly disappointing, 4.5% lower than what analysts had forecast. Earnings were a relative bright spot, with statutory earnings per share of kr4.59 20% higher than expected. Earnings are an important time for investors because they can track a company’s performance, look at what the analysts are forecasting for next year, and see if there has been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts’ latest (statutory) forecasts for next year.

Check out our latest analysis for Surgical Science Sweden

profit and sales growth
OM:SUS profit and turnover growth April 21, 2024

Following the latest results, Surgical Science Sweden’s six analysts now forecast sales of kr999.4m in 2024. If met, this would reflect a solid 13% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decline by 9.1% to kr4.17 in the same period. Leading up to this report, the analysts had been modeling revenues of kr1.01 billion and earnings per share (EPS) of kr4.24 in 2024. The consensus analysts don’t seem to have seen anything in these results that have changed their view on the company, as there has been no major change in their estimates.

The analysts reconfirmed their price target of kr222, showing that the company is performing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the average. The most optimistic analyst at Surgical Science Sweden has a price target of kr260 per share, while the most pessimistic analyst values ​​it at kr165. As you can see, the analysts aren’t all in agreement on the stock’s future, but the range of estimates is still fairly narrow, which could indicate that the outcome is not entirely unpredictable.

Now looking at the bigger picture, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We highlight that Surgical Science Sweden’s revenue growth is expected to slow, with the projected annual growth rate of 13% to the end of 2024 well below the historical growth rate of 54% per year over the past five years. Compare this to the other companies in the industry with analyst coverage, which are expected to grow their revenue (in aggregate) by 13% annually. So it’s pretty clear that while Surgical Science Sweden’s revenue growth is expected to slow, it is expected to grow roughly in line with the industry.

It comes down to

The important thing to take away is that there has been no major change in sentiment, with the analysts reaffirming that the company is performing in line with their previous earnings per share estimates. Fortunately, there were no real changes to revenue forecasts, while the company was still expected to grow in line with the industry as a whole. There was no real change to the consensus price target, suggesting that the company’s intrinsic value has not undergone any major changes according to the latest estimates.

With that in mind, we wouldn’t jump to a conclusion about Surgical Sciences Sweden. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple analysts at Surgical Science Sweden – going out to 2026, and you can see them for free on our platform here.

You can also see our analysis of the compensation and experience of Surgical Science Sweden’s Board of Directors and CEO, and whether company insiders have been buying shares.

Valuation is complex, but we help make it simple.

Invent or Surgical Science Sweden may be over or undervalued if you look at our comprehensive analysis, including fair value estimates, risks and cautions, dividends, insider transactions and financial health.

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This article from Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only an unbiased methodology and our articles are not intended as financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. We aim to provide you with targeted, long-term analysis based on fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Simply Wall St has no positions in the stocks mentioned.