Earnings release: Here’s why analysts cut their price target LINK Mobility Group Holding ASA (OB:LINK) to 27 kr

Shareholders of LINK Group Mobility Holding ASA (OB:LINK) will be pleased this week, given that the share price rose 15% to 15.50kr following its latest annual results. It was a good result overall, with revenue of 4.4 billion kr, about what analysts expected. Earnings are an important time for investors because they can follow a company’s performance, watch what analysts predict for the next year, and see if there has been a change in sentiment towards the company. We thought readers would find it interesting to see analysts’ latest post-earnings (statutory) forecasts for next year.

Check out our latest analysis for LINK Mobility Group Holding

OB:LINK Earnings and Revenue Growth February 13, 2022

Given the latest results, the current consensus of the two analysts at LINK Mobility Group Holding is for revenue of 5.15 billion kr in 2022, which would reflect a decent 17% increase in sales over the past 12 months. Earnings are expected to improve, with LINK Mobility Group Holding expecting to report statutory profit of 0.01 kr per share. Yet, prior to the latest results, analysts had forecast revenue of 5.12 billion kr and earnings per share (EPS) of 0.01 kr in 2022. Consensus analysts do not appear to have seen anything in these results that would have changed their view of the business, given that there was no major change in their estimates.

Absent any major earnings forecast changes, the consensus price target fell 27% to 27.00kr, suggesting that analysts might have previously hoped for improved earnings.

One way to get more context on these forecasts is to examine how they compare both to past performance and to the performance of other companies in the same industry. We emphasize that LINK Mobility Group Holding’s revenue growth is expected to slow, with the projected annualized growth rate of 17% through the end of 2022 being well below the historic growth of 31% per year over the past three years. By comparison, other companies in this sector covered by analysts are expected to grow their revenue by 23% per year. So it’s pretty clear that while revenue growth is expected to slow, the broader industry is also expected to grow faster than LINK Mobility Group Holding.

The essential

The most important thing to remember is that there has been no major shift in sentiment, with analysts confirming the company is performing in line with its previous earnings per share estimates. Fortunately, analysts have also reconfirmed their revenue estimates, suggesting that sales are in line with expectations – although our data suggests that LINK Mobility Group Holding’s revenue is expected to underperform the broader industry. Additionally, analysts have also cut their price targets, suggesting the latest news has led to greater pessimism about the company’s intrinsic value.

With that in mind, we wouldn’t be too quick to come to a conclusion on LINK Mobility Group Holding. Long-term earnings power is much more important than next year’s earnings. At least one analyst has provided forecasts through 2023, which can be viewed for free on our platform here.

It should also be noted that we found 2 warning signs for LINK Mobility Group Holding that you need to consider.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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