Last week, you might have seen that HiQ International AB (publ) (STO:HIQ) released its annual result to the market. The early response was not positive, with shares down 6.2% to kr50.10 in the past week. Revenues of kr1.8b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at kr3.16, missing estimates by 2.3%. Earnings are an important time for investors, as they can track a company's performance, look at what top analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Taking into account the latest results, the latest consensus from HiQ International's three analysts is for revenues of kr1.92b in 2020, which would reflect a reasonable 3.7% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to rise 3.1% to kr3.26. In the lead-up to this report, analysts had been modelling revenues of kr1.94b and earnings per share (EPS) of kr3.14 in 2020. Analysts seem to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at kr52.33, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 HiQ International at kr60.00 per share, while the most bearish prices it at kr47.00. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the HiQ International's past performance and to peers in the same market. We would highlight that HiQ International's revenue growth is expected to slow, with forecast 3.7% increase next year well below the historical 6.2%p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the market, which are in aggregate expected to see revenue growth of 7.3% next year. So it's pretty clear that, while revenue growth is expected to slow down, analysts still expect the wider market to grow faster than HiQ International.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards HiQ International following these results. On the plus side, there were no major changes to revenue estimates; although analyst forecasts imply revenues will perform worse than the wider market. The consensus price target held steady at kr52.33, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Still, the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for HiQ International going out to 2022, and you can see them free on our platform here.
We also provide an overview of the HiQ International Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.