There’s been a major selloff in ArcticZymes Technologies ASA (OB:AZT) shares in the week since it released its yearly report, with the stock down 25% to kr30.00. Revenues were in line with forecasts, at kr120m, although statutory earnings per share came in 16% below what the analyst expected, at kr0.37 per share. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We’ve gathered the most recent statutory forecasts to see whether the analyst has changed their earnings models, following these results.
See our latest analysis for ArcticZymes Technologies
After the latest results, the single analyst covering ArcticZymes Technologies are now predicting revenues of kr127.0m in 2024. If met, this would reflect a credible 6.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 6.2% to kr0.39. Before this earnings report, the analyst had been forecasting revenues of kr148.7m and earnings per share (EPS) of kr0.49 in 2024. Indeed, we can see that the analyst is a lot more bearish about ArcticZymes Technologies’ prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
Despite the cuts to forecast earnings, there was no real change to the kr32.00 price target, showing that the analyst doesn’t think the changes have a meaningful impact on its intrinsic value.
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 pretty clear that there is an expectation that ArcticZymes Technologies’ revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.1% growth on an annualised basis. This is compared to a historical growth rate of 14% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 44% per year. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than ArcticZymes Technologies.
The Bottom Line
The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for ArcticZymes Technologies. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have analyst estimates for ArcticZymes Technologies going out as far as 2026, and you can see them free on our platform here.
We don’t want to rain on the parade too much, but we did also find 1 warning sign for ArcticZymes Technologies that you need to be mindful 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.
