The Consensus EPS Estimates For SFP Tech Holdings Berhad (KLSE:SFPTECH) Just Fell Dramatically

Market forces rained on the parade of SFP Tech Holdings Berhad (KLSE:SFPTECH) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the current consensus, from the three analysts covering SFP Tech Holdings Berhad, is for revenues of RM155m in 2025, which would reflect a not inconsiderable 8.6% reduction in SFP Tech Holdings Berhad's sales over the past 12 months. Statutory earnings per share are presumed to soar 413% to RM0.021. Previously, the analysts had been modelling revenues of RM205m and earnings per share (EPS) of RM0.025 in 2025. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a real cut to earnings per share numbers as well.

Check out our latest analysis for SFP Tech Holdings Berhad

It'll come as no surprise then, to learn that the analysts have cut their price target 14% to RM0.83.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 8.6% annualised revenue decline to the end of 2025. That is a notable change from historical growth of 26% 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 15% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - SFP Tech Holdings Berhad is expected to lag 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 SFP Tech Holdings Berhad. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that SFP Tech Holdings Berhad's revenues are expected to grow slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with SFP Tech Holdings Berhad's business, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other risks we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.