Dometic Group AB (publ) Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Last week, you might have seen that Dometic Group AB (publ) (STO:DOM) released its quarterly result to the market. The early response was not positive, with shares down 7.5% to kr20.62 in the past week. Revenues of kr5.1b beat expectations by 6.2%. Unfortunately statutory earnings per share (EPS) fell well short of the mark, turning in a loss of kr13.71 compared to previous analyst expectations of a profit. 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.
After the latest results, the six analysts covering Dometic Group are now predicting revenues of kr21.8b in 2027. If met, this would reflect a reasonable 6.7% improvement in revenue compared to the last 12 months. Dometic Group is also expected to turn profitable, with statutory earnings of kr3.09 per share. In the lead-up to this report, the analysts had been modelling revenues of kr21.4b and earnings per share (EPS) of kr3.19 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
View our latest analysis for Dometic Group
It might be a surprise to learn that the consensus price target fell 8.7% to kr35.86, with the analysts clearly linking lower forecast earnings to the performance of the stock price. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Dometic Group at kr55.00 per share, while the most bearish prices it at kr23.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. One thing stands out from these estimates, which is that Dometic Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 5.3% annualised growth until the end of 2027. If achieved, this would be a much better result than the 4.4% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 2.5% annually. Not only are Dometic Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment 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. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
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 estimates - from multiple Dometic Group analysts - going out to 2028, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Dometic Group you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.