Revenue Downgrade: Here's What Analysts Forecast For UMediC Group Berhad (KLSE:UMC)

Today is shaping up negative for UMediC Group Berhad (KLSE:UMC) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the latest consensus from UMediC Group Berhad's dual analysts is for revenues of RM59m in 2024, which would reflect a huge 21% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 26% to RM0.035. Prior to this update, the analysts had been forecasting revenues of RM69m and earnings per share (EPS) of RM0.035 in 2024. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a measurable cut to revenues and reconfirming their earnings per share estimates.

View our latest analysis for UMediC Group Berhad

The average price target was steady at RM1.00 even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that UMediC Group Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% 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 3.5% 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 there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on UMediC Group Berhad after today.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with UMediC Group Berhad, including concerns around earnings quality. For more information, you can click here to discover this and the 1 other warning sign we've identified.

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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.