Last week, you might have seen that Starbreeze AB (publ) (STO:STAR B) released its quarterly result to the market. The early response was not positive, with shares down 5.9% to kr0.11 in the past week. Revenues fell badly short of expectations, with revenue of kr26m being some 23% below what the analyst had forecast. Statutory losses were in line with forecasts, with Starbreeze losing kr0.02 a share. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is 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 estimate to see what could be in store for next year.
Taking into account the latest results, the current consensus, from the solitary analyst covering Starbreeze, is for revenues of kr116.0m in 2026. This implies a painful 24% reduction in Starbreeze's revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 70% to kr0.08. Yet prior to the latest earnings, the analyst had been forecasting revenues of kr143.0m and losses of kr0.07 per share in 2026. So there's been quite a change-up of views after the recent consensus updates, withthe analyst making a serious cut to their revenue outlook while also expecting losses per share to increase.
Check out our latest analysis for Starbreeze
The average price target fell 41% to kr0.08, implicitly signalling that lower earnings per share are a leading indicator for Starbreeze's valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 41% by the end of 2026. This indicates a significant reduction from annual growth of 9.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.0% annually for the foreseeable future. It's pretty clear that Starbreeze's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst increased their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that in mind, we wouldn't be too quick to come to a conclusion on Starbreeze. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Starbreeze going out as far as 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 3 warning signs for Starbreeze that you should be aware of.
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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.