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. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Supercomnet Technologies Berhad's three analysts are now forecasting revenues of RM165m in 2023. This would be a meaningful 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to increase 8.1% to RM0.038. Before this latest update, the analysts had been forecasting revenues of RM195m and earnings per share (EPS) of RM0.044 in 2023. 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.

View our latest analysis for Supercomnet Technologies Berhad

It'll come as no surprise then, to learn that the analysts have cut their price target 9.5% to RM1.68.

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. The analysts are definitely expecting Supercomnet Technologies Berhad's growth to accelerate, with the forecast 18% annualised growth to the end of 2023 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Supercomnet Technologies Berhad is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Supercomnet Technologies Berhad. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Supercomnet Technologies Berhad.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Supercomnet Technologies Berhad analysts - going out to 2025, 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.

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.