Analysts Are Updating Their New Wave Group AB (publ) (STO:NEWA B) Estimates After Its Third-Quarter Results
It's been a good week for New Wave Group AB (publ) (STO:NEWA B) shareholders, because the company has just released its latest third-quarter results, and the shares gained 2.9% to kr104. The result was positive overall - although revenues of kr2.7b were in line with what the analysts predicted, New Wave Group surprised by delivering a statutory profit of kr1.77 per share, modestly greater than expected. 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.
Taking into account the latest results, the most recent consensus for New Wave Group from four analysts is for revenues of kr12.6b in 2027. If met, it would imply a meaningful 17% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 28% to kr8.41. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr12.8b and earnings per share (EPS) of kr8.72 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
See our latest analysis for New Wave Group
The consensus price target held steady at kr114, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on New Wave Group, with the most bullish analyst valuing it at kr130 and the most bearish at kr105 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that New Wave Group's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 7.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.1% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that New Wave 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 New Wave Group. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at kr114, 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 New Wave Group going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for New Wave Group that you should be aware of.
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