This Analyst Just Wrote A Brand New Outlook For Optimax Holdings Berhad's (KLSE:OPTIMAX) Business

Optimax Holdings Berhad (KLSE:OPTIMAX) shareholders will have a reason to smile today, with the covering analyst making substantial upgrades to this year's statutory forecasts. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

After the upgrade, the sole analyst covering Optimax Holdings Berhad is now predicting revenues of RM84m in 2021. If met, this would reflect a reasonable 4.8% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to climb 12% to RM0.045. Before this latest update, the analyst had been forecasting revenues of RM73m and earnings per share (EPS) of RM0.033 in 2021. There has definitely been an improvement in perception recently, with the analyst substantially increasing both their earnings and revenue estimates.

View our latest analysis for Optimax Holdings Berhad

With these upgrades, we're not surprised to see that the analyst has lifted their price target 10% to RM1.60 per share.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Optimax Holdings Berhad's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Optimax Holdings Berhad's revenue growth will slow down substantially, with revenues to the end of 2021 expected to display 4.8% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Optimax Holdings Berhad is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us from these new estimates is that the analyst upgraded their earnings per share estimates, with improved earnings power expected for this year. Fortunately, they also upgraded their revenue estimates, and are forecasting revenues to grow slower than the wider market. Given that the consensus looks almost universally bullish, with a substantial increase to forecasts and a higher price target, Optimax Holdings Berhad could be worth investigating further.

The covering analyst is definitely bullish on Optimax Holdings Berhad, but no company is perfect. Indeed, you should know that there are several potential concerns to be aware of, including concerns around earnings quality. You can learn more, and discover the 2 other risks we've identified, for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.