Supermax Corporation Berhad Recorded A 7.1% Miss On Revenue: Analysts Are Revisiting Their Models

Supermax Corporation Berhad (KLSE:SUPERMX) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to RM0.76 in the week after its latest yearly results. Results look mixed - while revenue fell marginally short of analyst estimates at RM2.7b, statutory earnings beat expectations 4.5%, with Supermax Corporation Berhad reporting profits of RM0.28 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Supermax Corporation Berhad

Taking into account the latest results, the ten analysts covering Supermax Corporation Berhad provided consensus estimates of RM1.69b revenue in 2023, which would reflect a painful 37% decline on its sales over the past 12 months. Statutory earnings per share are expected to nosedive 81% to RM0.051 in the same period. Before this earnings report, the analysts had been forecasting revenues of RM2.27b and earnings per share (EPS) of RM0.075 in 2023. It looks like sentiment has declined substantially in the aftermath of these results, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

The consensus price target fell 14% to RM0.73, with the weaker earnings outlook clearly leading valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Supermax Corporation Berhad analyst has a price target of RM1.15 per share, while the most pessimistic values it at RM0.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 37% by the end of 2023. This indicates a significant reduction from annual growth of 36% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.1% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Supermax Corporation Berhad is expected to lag 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Supermax Corporation Berhad's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Supermax Corporation Berhad. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Supermax Corporation Berhad going out to 2025, and you can see them free on our platform here..

Before you take the next step you should know about the 4 warning signs for Supermax Corporation Berhad (2 can't be ignored!) 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.