Sats ASA Just Beat EPS By 16%: Here's What Analysts Think Will Happen Next

Investors in Sats ASA (OB:SATS) had a good week, as its shares rose 5.3% to close at kr43.90 following the release of its quarterly results. It looks like a credible result overall - although revenues of kr1.3b were in line with what the analysts predicted, Sats surprised by delivering a statutory profit of kr0.69 per share, a notable 16% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from Sats' five analysts is for revenues of kr5.93b in 2027. This would reflect a satisfactory 4.5% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 25% to kr3.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of kr6.02b and earnings per share (EPS) of kr3.48 in 2027. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

View our latest analysis for Sats

There's been no major changes to the consensus price target of kr51.80, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic Sats analyst has a price target of kr60.00 per share, while the most pessimistic values it at kr45.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Sats is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Sats' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 3.6% growth on an annualised basis. This is compared to a historical growth rate of 10% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 6.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sats is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Sats' earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Sats. Long-term earnings power is much more important than next year's profits. We have forecasts for Sats going out to 2028, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Sats , and understanding this should be part of your investment process.

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