Downgrade: Here's How Analysts See UMediC Group Berhad (KLSE:UMC) Performing In The Near Term

The analysts covering UMediC Group Berhad (KLSE:UMC) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from UMediC Group Berhad's three analysts is for revenues of RM58m in 2025 which - if met - would reflect a meaningful 13% increase on its sales over the past 12 months. Statutory earnings per share are presumed to accumulate 7.4% to RM0.024. Before this latest update, the analysts had been forecasting revenues of RM66m and earnings per share (EPS) of RM0.029 in 2025. Indeed, we can see that the analysts are a lot more bearish about UMediC Group Berhad's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for UMediC Group Berhad

It'll come as no surprise then, to learn that the analysts have cut their price target 16% to RM0.66.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the UMediC Group Berhad's past performance and to peers in the same industry. It's clear from the latest estimates that UMediC Group Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.2% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect UMediC Group Berhad to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on UMediC Group Berhad that suggests the company could be somewhat overvalued. Learn why, and examine the assumptions that underpin our valuation by visiting our free platform here to learn more about our valuation approach.

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.