kr226: This is what analysts think PowerCell Sweden AB (publ) (STO: PCELL) is worth after its latest results
A week ago, PowerCell Sweden AB (publ) (STO: PCELL) came out with a strong set of full-year figures that could potentially lead to a reversal of the share. The results were overall credible, with revenues of SEK 160 million beating expectations by 15%. Statutory losses were SEK 1.44 per share, 12% lower than analysts had predicted. Following the results, the analysts have updated their earnings model and it would be good to know if they believe that there has been a sharp change in the company’s future prospects, or if it is business as usual. So we gathered the latest forecasts after profit to see what estimates suggest is in store for next year.
See our latest analysis for PowerCell Sweden
Following the latest results, the four analysts covering PowerCell Sweden now forecast revenues of SEK 259.2 million in 2022. If this is achieved, this would reflect a huge 62% improvement in sales compared with the last 12 months. The losses are forecast to fall significantly and shrink by 50% to SEK 0.72. Prior to this latest report, Consensus had expected earnings of SEK 254.2 million and SEK 0.72 per share in losses.
As a result, it is unexpected to see that the consensus price target fell by 6.4% to SEK 226, where analysts seem to be more concerned about ongoing losses, despite the fact that they have not made any major changes in their forecasts. However, this is not the only conclusion we can draw from this data, as some investors also like to take into account the spread in estimates when evaluating analysts’ price targets. The most optimistic PowerCell Sweden analyst has a price target of SEK 240 per share, while the most pessimistic value it at SEK 208. Nevertheless, with a relatively close grouping of estimates, analysts appear to be fairly confident in their values, indicating that PowerCell Sweden is an easy business to forecast or that analysts all use similar assumptions.
When we now take a look at the bigger picture, one of the ways we can understand these forecasts is to see how they compare with both previous results and industry growth estimates. Analysts definitely expect PowerCell Sweden’s growth to accelerate, with the forecast of 62% annual growth until the end of 2022 which ranks positively together with a historical growth of 37% per year over the past five years. Compare this with other companies in the same industry, which are expected to grow their revenues by 34% annually. In view of the forecast increase in revenues, it is quite clear that PowerCell Sweden is expected to grow much faster than its industry.
The points
The most obvious conclusion is that analysts did not make any changes in their forecasts for a loss next year. Fortunately, there were no major changes in revenue forecasts, and the business is still expected to grow faster than the industry as a whole. The consensus price target fell measurably, with analysts apparently not calm about the latest results, which led to a lower estimate of PowerCell Sweden’s future valuation.
Following that line of thinking, we believe that the long-term outlook for the business is much more relevant than next year’s results. At Simply Wall St, we have a complete range of analyst estimates for PowerCell Sweden that expire in 2024, and you can see them for free on our platform here.
But before you get too enthusiastic, we’ve discovered it 1 warning sign for PowerCell Sweden which you should be aware of.
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This article by Simply Wall St is general in nature. We provide comments based on historical data and analyst forecasts only using an impartial method and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any shares and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis driven by basic data. Please note that our analysis may not take into account the latest price sensitive company announcements or qualitative material. Simply Wall St has no position in any of the shares mentioned.