Solarvest Holdings Berhad Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Solarvest Holdings Berhad (KLSE:SLVEST) released its yearly result to the market. The early response was not positive, with shares down 4.7% to RM0.71 in the past week. Revenues of RM178m beat forecasts by 11%, although statutory earnings per share disappointed slightly, coming in 8.2% below expectations at RM0.01. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Solarvest Holdings Berhad

Taking into account the latest results, the most recent consensus for Solarvest Holdings Berhad from three analysts is for revenues of RM443.3m in 2023 which, if met, would be a huge 149% increase on its sales over the past 12 months. Statutory earnings per share are predicted to bounce 200% to RM0.031. Before this earnings report, the analysts had been forecasting revenues of RM477.3m and earnings per share (EPS) of RM0.043 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a large cut to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 29% to RM0.85. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Solarvest Holdings Berhad analyst has a price target of RM0.93 per share, while the most pessimistic values it at RM0.77. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's clear from the latest estimates that Solarvest Holdings Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 149% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 20% p.a. 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 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Solarvest Holdings Berhad is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded their revenue estimates, although industry data suggests that Solarvest Holdings Berhad's revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Solarvest Holdings Berhad analysts - going out to 2025, and you can see them free on our platform here.

Plus, you should also learn about the 4 warning signs we've spotted with Solarvest Holdings Berhad (including 1 which is potentially serious) .

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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.