Earnings Miss: Here's What CTOS Digital Berhad (KLSE:CTOS) Analysts Are Forecasting For This Year

It's shaping up to be a tough period for CTOS Digital Berhad (KLSE:CTOS), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 5.5% short of analyst estimates at RM305m, and statutory earnings of RM0.046 per share missed forecasts by 5.3%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on CTOS Digital Berhad after the latest results.

See our latest analysis for CTOS Digital Berhad

Taking into account the latest results, the consensus forecast from CTOS Digital Berhad's nine analysts is for revenues of RM348.6m in 2025. This reflects a meaningful 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to step up 15% to RM0.053. Before this earnings report, the analysts had been forecasting revenues of RM380.1m and earnings per share (EPS) of RM0.059 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of RM1.57, suggesting the downgrades are not expected to have a long-term impact on CTOS Digital Berhad's valuation. 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. There are some variant perceptions on CTOS Digital Berhad, with the most bullish analyst valuing it at RM1.84 and the most bearish at RM1.40 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CTOS Digital Berhad's past performance and to peers in the same industry. We would highlight that CTOS Digital Berhad's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2025 being well below the historical 20% 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 9.2% annually. Even after the forecast slowdown in growth, it seems obvious that CTOS Digital Berhad is also expected to grow faster than the wider 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at RM1.57, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on CTOS Digital Berhad. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple CTOS Digital Berhad analysts - going out to 2027, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with CTOS Digital Berhad .

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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.