Hoist Finance AB (publ) Fell 7.5% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

There’s been a notable change in appetite for Hoist Finance AB (publ) (STO:HOFI) shares in the week since its first-quarter report, with the stock down 16% to kr22.78. Results look mixed – while revenue fell marginally short of analyst estimates at kr529m, statutory earnings were in line with expectations, at kr6.07 per share. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we’ve gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Hoist Finance

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Taking into account the latest results, the current consensus, from the three analysts covering Hoist Finance, is for revenues of kr2.42b in 2020, which would reflect a considerable 16% reduction in Hoist Finance’s sales over the past 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -kr0.52 per share in 2020. Before this earnings report, the analysts had been forecasting revenues of kr2.54b and earnings per share (EPS) of kr1.64 in 2020. The analysts have made an abrupt about-face on Hoist Finance, administering a small dip in to revenue forecasts and slashing the earnings outlook from a profit to loss.

The average price target fell 10% to kr40.75, implicitly signalling that lower earnings per share are a leading indicator for Hoist Finance’s valuation. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Hoist Finance at kr51.00 per share, while the most bearish prices it at kr35.00. This shows there is still a bit of diversity in estimates, but analysts don’t appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hoist Finance’s past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with the forecast 16% revenue decline a notable change from historical growth of 13% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 9.9% next year. It’s pretty clear that Hoist Finance’s revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Hoist Finance dropped from profits to a loss next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hoist Finance’s future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Hoist Finance analysts – going out to 2022, and you can see them free on our platform here.

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