It's been a mediocre week for W5 Solutions AB (publ) (STO:W5) shareholders, with the stock dropping 19% to kr38.50 in the week since its latest quarterly results. Revenues of kr228m crushed expectations, although expenses also blew out, with the company reporting a statutory loss per share of kr1.19, 1,429% bigger than analysts expected. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the three analysts covering W5 Solutions are now predicting revenues of kr783.6m in 2026. If met, this would reflect a solid 20% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 106% to kr0.48. Before this earnings report, the analysts had been forecasting revenues of kr734.6m and earnings per share (EPS) of kr1.81 in 2026. So it's pretty clear the analysts have mixed opinions on W5 Solutions after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.
See our latest analysis for W5 Solutions
The analysts also cut W5 Solutions' price target 23% to kr64.67, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in revenue. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values W5 Solutions at kr82.00 per share, while the most bearish prices it at kr55.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await W5 Solutions 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. It's clear from the latest estimates that W5 Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 43% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 29% p.a. 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 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect W5 Solutions 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. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of W5 Solutions' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on W5 Solutions. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for W5 Solutions going out to 2028, and you can see them free on our platform here..
Even so, be aware that W5 Solutions is showing 1 warning sign in our investment analysis , you should know about...
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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.