Troax Group AB (publ) Reported A Surprise Loss, And Analysts Have Updated Their Forecasts
Shareholders will be ecstatic, with their stake up 38% over the past week following Troax Group AB (publ)'s (STO:TROAX) latest quarterly results. The results don't look great, especially considering that the analysts had been forecasting a profit and Troax Group delivered a statutory loss of €0.10 per share. Revenues of €84m did beat expectations by 9.2% though. 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.
After the latest results, the four analysts covering Troax Group are now predicting revenues of €336.9m in 2026. If met, this would reflect a decent 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 542% to €0.26. In the lead-up to this report, the analysts had been modelling revenues of €308.7m and earnings per share (EPS) of €0.44 in 2026. So it's pretty clear the analysts have mixed opinions on Troax Group after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.
Check out our latest analysis for Troax Group
Curiously, the consensus price target rose 5.8% to kr158. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings. 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 Troax Group at kr170 per share, while the most bearish prices it at kr145. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Troax Group's rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 2.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.6% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Troax Group 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 Troax Group. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. 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.
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 estimates - from multiple Troax Group analysts - going out to 2028, and you can see them free on our platform here.
It is also worth noting that we have found 5 warning signs for Troax Group (2 are a bit unpleasant!) that you need to take into consideration.
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