Econpile Holdings Berhad (KLSE:ECONBHD) Analysts Are Reducing Their Forecasts For This Year

Today is shaping up negative for Econpile Holdings Berhad (KLSE:ECONBHD) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the latest downgrade, Econpile Holdings Berhad's four analysts currently expect revenues in 2022 to be RM369m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 46% to RM0.01. Prior to this update, the analysts had been forecasting revenues of RM415m and earnings per share (EPS) of RM0.0063 in 2022. So we can see that the consensus has become notably more bearish on Econpile Holdings Berhad's outlook with these numbers, making a measurable 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.

View our latest analysis for Econpile Holdings Berhad

The consensus price target fell 27% to RM0.20, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Econpile Holdings Berhad, with the most bullish analyst valuing it at RM0.29 and the most bearish at RM0.14 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's also worth noting that the years of declining sales look to have come to an end, with the forecast for flat revenues to the end of 2022. Historically, Econpile Holdings Berhad's sales have shrunk approximately 13% annually over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 14% per year. Although Econpile Holdings Berhad's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Econpile Holdings Berhad dropped from profits to a loss this year. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower 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.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Econpile Holdings Berhad going out to 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.