News Flash: 4 Analysts Think Gabungan AQRS Berhad (KLSE:GBGAQRS) Earnings Are Under Threat

One thing we could say about the analysts on Gabungan AQRS Berhad (KLSE:GBGAQRS) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Gabungan AQRS Berhad's four analysts are now forecasting revenues of RM435m in 2022. This would be a sizeable 47% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 95% to RM0.066. Prior to this update, the analysts had been forecasting revenues of RM490m and earnings per share (EPS) of RM0.075 in 2022. Indeed, we can see that the analysts are a lot more bearish about Gabungan AQRS Berhad's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Gabungan AQRS Berhad

The consensus price target fell 8.3% to RM0.47, with the weaker earnings outlook clearly leading analyst valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Gabungan AQRS Berhad analyst has a price target of RM0.52 per share, while the most pessimistic values it at RM0.39. Still, with such a tight range of estimates, it suggests the 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. For example, we noticed that Gabungan AQRS Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 47% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 13% 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 13% per year. So it looks like Gabungan AQRS 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 analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Gabungan AQRS Berhad.

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 Gabungan AQRS Berhad analysts - going out to 2024, and you can see them 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. 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.