Earnings Miss: Trajan Group Holdings Limited Missed EPS By 86% And Analysts Are Revising Their Forecasts

Last week, you might have seen that Trajan Group Holdings Limited (ASX:TRJ) released its full-year result to the market. The early response was not positive, with shares down 9.7% to AU$1.59 in the past week. Statutory earnings per share fell badly short of expectations, coming in at AU$0.012, some 86% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at AU$162m. 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.

See our latest analysis for Trajan Group Holdings

Taking into account the latest results, the current consensus from Trajan Group Holdings' two analysts is for revenues of AU$174.5m in 2024. This would reflect a credible 7.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 649% to AU$0.093. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$177.4m and earnings per share (EPS) of AU$0.093 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

With no major changes to earnings forecasts, the consensus price target fell 25% to AU$2.40, suggesting that the analysts might have previously been hoping for an earnings upgrade.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Trajan Group Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.6% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.6% annually. Factoring in the forecast slowdown in growth, it looks like Trajan Group Holdings is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

It might also be worth considering whether Trajan Group Holdings' debt load is appropriate, using our debt analysis tools on the Simply Wall St 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.