Downgrade: What You Need To Know About The Latest Rohas Tecnic Berhad (KLSE:ROHAS) Forecasts

Market forces rained on the parade of Rohas Tecnic Berhad (KLSE:ROHAS) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the solo analyst covering Rohas Tecnic Berhad provided consensus estimates of RM223m revenue in 2021, which would reflect a definite 14% decline on its sales over the past 12 months. Losses are forecast to narrow 5.5% to RM0.015 per share. Before this latest update, the analyst had been forecasting revenues of RM442m and earnings per share (EPS) of RM0.033 in 2021. There looks to have been a major change in sentiment regarding Rohas Tecnic Berhad's prospects, with a pretty serious reduction to revenues and the analyst now forecasting a loss instead of a profit.

See our latest analysis for Rohas Tecnic Berhad

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Rohas Tecnic Berhad's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 14% by the end of 2021. This indicates a significant reduction from annual growth of 0.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. It's pretty clear that Rohas Tecnic Berhad's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Rohas Tecnic Berhad dropped from profits to a loss this year. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that Rohas Tecnic Berhad's revenues are expected to grow slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like the analyst has become a lot more bearish on Rohas Tecnic Berhad, and their negativity could be grounds for caution.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Rohas Tecnic Berhad going out as far as 2023, 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.

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.

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