One SMRT Holdings Berhad (KLSE:SMRT) Analyst Has Been Cutting Their Forecasts

One thing we could say about the covering analyst on SMRT Holdings Berhad (KLSE:SMRT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

We've discovered 3 warning signs about SMRT Holdings Berhad. View them for free.

After the downgrade, the consensus from SMRT Holdings Berhad's one analyst is for revenues of RM68m in 2025, which would reflect a noticeable 6.0% decline in sales compared to the last year of performance. Statutory earnings per share are presumed to increase 3.5% to RM0.061. Before this latest update, the analyst had been forecasting revenues of RM77m and earnings per share (EPS) of RM0.067 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

Check out our latest analysis for SMRT Holdings Berhad

The consensus price target fell 5.5% to RM2.07, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 12% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 10% annually. So it's pretty clear that, while it does have declining revenues, the analyst also expect SMRT Holdings Berhad to suffer worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for SMRT Holdings Berhad. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with the analyst seemingly not reassured by recent business developments, leading to a lower estimate of SMRT Holdings Berhad's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on SMRT Holdings Berhad after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with SMRT Holdings Berhad, including concerns around earnings quality. For more information, you can click here to discover this and the 2 other flags 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.