Fractal Gaming Group AB (publ) Recorded A 32% Miss On Revenue: Analysts Are Revisiting Their Models
Fractal Gaming Group AB (publ) (STO:FRACTL) last week reported its latest second-quarter results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues were kr75m, 32% shy of what the analysts were expecting, although statutory earnings of kr1.10 per share were roughly in line with what was 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus, from the dual analysts covering Fractal Gaming Group, is for revenues of kr453.0m in 2026. This implies a sizeable 23% reduction in Fractal Gaming Group's revenue over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching kr0.95. Before this earnings announcement, the analysts had been modelling revenues of kr543.0m and losses of kr0.12 per share in 2026. 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.
Check out our latest analysis for Fractal Gaming Group
The average price target was broadly unchanged at kr14.00, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 41% by the end of 2026. This indicates a significant reduction from annual growth of 10% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 14% annually for the foreseeable future. It's pretty clear that Fractal Gaming Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at kr14.00, with the latest estimates not enough to have an impact on their price targets.
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 2028, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Fractal Gaming Group (1 makes us a bit uncomfortable) 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.