Agthia Group PJSC (ADX:AGTHIA) Just Released Its Half-Yearly Earnings: Here's What Analysts Think

Last week saw the newest half-yearly earnings release from Agthia Group PJSC (ADX:AGTHIA), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of د.إ2.2b and statutory earnings per share of د.إ0.16. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Agthia Group PJSC

After the latest results, the four analysts covering Agthia Group PJSC are now predicting revenues of د.إ4.52b in 2023. If met, this would reflect a reasonable 5.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 12% to د.إ0.36. In the lead-up to this report, the analysts had been modelling revenues of د.إ4.51b and earnings per share (EPS) of د.إ0.38 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at د.إ5.88, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Agthia Group PJSC, with the most bullish analyst valuing it at د.إ6.70 and the most bearish at د.إ4.70 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 pretty clear that there is an expectation that Agthia Group PJSC's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.7% annually. So it's pretty clear that, while Agthia Group PJSC's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Agthia Group PJSC. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at د.إ5.88, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Agthia Group PJSC. Long-term earnings power is much more important than next year's profits. We have forecasts for Agthia Group PJSC going out to 2025, and you can see them free on our platform here.

You can also see whether Agthia Group PJSC is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.