RaySearch Laboratories AB (publ) Just Missed EPS By 5.0%: Here's What Analysts Think Will Happen Next
It's been a good week for RaySearch Laboratories AB (publ) (STO:RAY B) shareholders, because the company has just released its latest second-quarter results, and the shares gained 7.9% to kr194. Revenues of kr272m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr0.57, missing estimates by 5.0%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on RaySearch Laboratories after the latest results.
After the latest results, the two analysts covering RaySearch Laboratories are now predicting revenues of kr1.40b in 2026. If met, this would reflect a decent 9.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 29% to kr8.00. Before this earnings report, the analysts had been forecasting revenues of kr1.40b and earnings per share (EPS) of kr7.80 in 2026. So the consensus seems to have become somewhat more optimistic on RaySearch Laboratories' earnings potential following these results.
Check out our latest analysis for RaySearch Laboratories
The consensus price target was unchanged at kr298, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting RaySearch Laboratories' growth to accelerate, with the forecast 21% annualised growth to the end of 2026 ranking favourably alongside historical growth of 16% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that RaySearch Laboratories is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards RaySearch Laboratories following these results. 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 kr298, 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.
However, before you get too enthused, we've discovered 1 warning sign for RaySearch Laboratories that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.