One Supercomnet Technologies Berhad (KLSE:SCOMNET) Broker Just Cut Their Revenue Forecasts By 11%

Market forces rained on the parade of Supercomnet Technologies Berhad (KLSE:SCOMNET) shareholders today, when the covering analyst downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Supercomnet Technologies Berhad from its single analyst is for revenues of RM133m in 2020 which, if met, would be a meaningful 8.6% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 36% to RM0.042. Previously, the analyst had been modelling revenues of RM150m and earnings per share (EPS) of RM0.046 in 2020. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

View our latest analysis for Supercomnet Technologies Berhad

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Supercomnet Technologies Berhad's revenue growth is expected to slow, with forecast 8.6% increase next year well below the historical 35% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 32% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Supercomnet Technologies Berhad.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Supercomnet Technologies Berhad. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Supercomnet Technologies Berhad after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2021, which can be seen 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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