Earnings Release: Here's Why Analysts Cut Their Mader Group Limited (ASX:MAD) Price Target To AU$6.53

It's been a sad week for Mader Group Limited (ASX:MAD), who've watched their investment drop 11% to AU$5.37 in the week since the company reported its yearly result. It was a credible result overall, with revenues of AU$774m and statutory earnings per share of AU$0.25 both in line with analyst estimates, showing that Mader Group is executing in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Mader Group

After the latest results, the four analysts covering Mader Group are now predicting revenues of AU$881.7m in 2025. If met, this would reflect a meaningful 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 9.9% to AU$0.28. Before this earnings report, the analysts had been forecasting revenues of AU$920.8m and earnings per share (EPS) of AU$0.31 in 2025. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.

The consensus price target fell 8.1% to AU$6.53, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Mader Group analyst has a price target of AU$6.80 per share, while the most pessimistic values it at AU$6.38. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Mader Group is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Mader Group's past performance and to peers in the same industry. We would highlight that Mader Group's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 26% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 4.6% per year. Even after the forecast slowdown in growth, it seems obvious that Mader Group is also expected 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. They also downgraded Mader Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Mader Group going out to 2027, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Mader Group that we have uncovered.

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.