Results: ATA IMS Berhad Beat Earnings Expectations And Analysts Now Have New Forecasts

ATA IMS Berhad (KLSE:ATAIMS) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to RM2.37 in the week after its latest annual results. ATA IMS Berhad reported RM4.2b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of RM0.12 beat expectations, being 9.8% higher than what the analysts 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for ATA IMS Berhad

Taking into account the latest results, the consensus forecast from ATA IMS Berhad's four analysts is for revenues of RM5.30b in 2022, which would reflect a major 26% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 22% to RM0.15. In the lead-up to this report, the analysts had been modelling revenues of RM5.48b and earnings per share (EPS) of RM0.16 in 2022. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to RM3.23. 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 ATA IMS Berhad analyst has a price target of RM3.56 per share, while the most pessimistic values it at RM2.95. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that ATA IMS Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 18% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect ATA IMS Berhad to grow faster than 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. They also downgraded their revenue estimates, although industry data suggests that ATA IMS Berhad's revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ATA IMS Berhad's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for ATA IMS Berhad going out to 2024, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for ATA IMS Berhad you should be aware of, and 2 of them can't be ignored.

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This article by Simply Wall St is general in nature. 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.
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