Power Root Berhad Beat Analyst Estimates: See What The Consensus Is Forecasting For This Year

As you might know, Power Root Berhad (KLSE:PWROOT) just kicked off its latest annual results with some very strong numbers. Results were good overall, with revenues beating analyst predictions by 3.3% to hit RM460m. Statutory earnings per share (EPS) came in at RM0.14, some 8.4% above whatthe analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Power Root Berhad after the latest results.

See our latest analysis for Power Root Berhad

After the latest results, the four analysts covering Power Root Berhad are now predicting revenues of RM482.3m in 2024. If met, this would reflect a satisfactory 4.8% improvement in sales compared to the last 12 months. Per-share earnings are expected to accumulate 3.7% to RM0.14. In the lead-up to this report, the analysts had been modelling revenues of RM472.1m and earnings per share (EPS) of RM0.14 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of RM2.71, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Power Root Berhad analyst has a price target of RM3.00 per share, while the most pessimistic values it at RM2.46. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's clear from the latest estimates that Power Root Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 4.8% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.1% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 4.9% per year. Power Root Berhad is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Power Root Berhad's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at RM2.71, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Power Root Berhad going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Power Root Berhad (1 is concerning!) that we have uncovered.

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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.