Downgrade: What You Need To Know About The Latest Destini Berhad (KLSE:DESTINI) Forecasts

The latest analyst coverage could presage a bad day for Destini Berhad (KLSE:DESTINI), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.

After this downgrade, Destini Berhad's solo analyst is now forecasting revenues of RM171m in 2021. This would be a sizeable 25% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 93% to RM0.01. Prior to this update, the analyst had been forecasting revenues of RM371m and earnings per share (EPS) of RM0.01 in 2021. So we can see that the consensus has become notably more bearish on Destini Berhad's outlook with these numbers, making a sizeable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

See our latest analysis for Destini Berhad

The consensus price target fell 82% to RM0.05, implicitly signalling that lower earnings per share are a leading indicator for Destini Berhad's valuation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Destini Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 25% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 11% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 16% per year. So it looks like Destini Berhad is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analyst is expecting Destini Berhad to become unprofitable this year. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

That said, this analyst might have good reason to be negative on Destini Berhad, given dilutive stock issuance over the past year. Learn more, and discover the 2 other risks we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. 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.
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