AME Elite Consortium Berhad (KLSE:AME) Analysts Are Cutting Their Estimates: Here's What You Need To Know

AME Elite Consortium Berhad (KLSE:AME) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results were roughly in line with estimates, with revenues of RM398m and statutory earnings per share of RM0.076. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for AME Elite Consortium Berhad

Taking into account the latest results, the most recent consensus for AME Elite Consortium Berhad from four analysts is for revenues of RM566.2m in 2023 which, if met, would be a huge 42% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 40% to RM0.11. Before this earnings report, the analysts had been forecasting revenues of RM634.6m and earnings per share (EPS) of RM0.11 in 2023. It looks like sentiment has fallen somewhat in the aftermath of these results, with a real cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

The analysts made no major changes to their price target of RM1.78, suggesting the downgrades are not expected to have a long-term impact on AME Elite Consortium Berhad's valuation. 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 AME Elite Consortium Berhad analyst has a price target of RM2.10 per share, while the most pessimistic values it at RM1.63. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 clear from the latest estimates that AME Elite Consortium Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 42% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 7.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect AME Elite Consortium Berhad to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for AME Elite Consortium Berhad. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple AME Elite Consortium Berhad analysts - going out to 2025, and you can see them free on our platform here.

You can also view our analysis of AME Elite Consortium Berhad's balance sheet, and whether we think AME Elite Consortium Berhad is carrying too much debt, for free on our platform here.

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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.