Time To Worry? Analysts Are Downgrading Their Supercomnet Technologies Berhad (KLSE:SCOMNET) Outlook

The analysts covering Supercomnet Technologies Berhad (KLSE:SCOMNET) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from Supercomnet Technologies Berhad's three analysts is for revenues of RM161m in 2024 which - if met - would reflect a solid 9.9% increase on its sales over the past 12 months. Per-share earnings are expected to rise 8.7% to RM0.037. Previously, the analysts had been modelling revenues of RM180m and earnings per share (EPS) of RM0.042 in 2024. Indeed, we can see that the analysts are a lot more bearish about Supercomnet Technologies Berhad's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Supercomnet Technologies Berhad

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Supercomnet Technologies Berhad's past performance and to peers in the same industry. The analysts are definitely expecting Supercomnet Technologies Berhad's growth to accelerate, with the forecast 9.9% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.9% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 32% per year. So it's clear that despite the acceleration in growth, Supercomnet Technologies Berhad is expected to grow meaningfully slower than the industry average.

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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Supercomnet Technologies Berhad, and their negativity could be grounds for caution.

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 Supercomnet Technologies Berhad going out to 2026, 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 backed by insiders.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.