HeveaBoard Berhad Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

Shareholders might have noticed that HeveaBoard Berhad (KLSE:HEVEA) filed its annual result this time last week. The early response was not positive, with shares down 4.0% to RM0.36 in the past week. The results were mixed; although revenues of RM406m fell 20% short of analyst estimates, statutory earnings per share (EPS) of RM0.017 beat expectations by 18%. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

Check out our latest analysis for HeveaBoard Berhad

After the latest results, the lone analyst covering HeveaBoard Berhad are now predicting revenues of RM532.1m in 2023. If met, this would reflect a sizeable 31% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 3.6% to RM0.016 in the same period. In the lead-up to this report, the analyst had been modelling revenues of RM536.2m and earnings per share (EPS) of RM0.018 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target fell 11% to RM0.34, with the analyst clearly linking lower forecast earnings to the performance of the stock price.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the HeveaBoard Berhad's past performance and to peers in the same industry. One thing stands out from these estimates, which is that HeveaBoard Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 31% annualised growth until the end of 2023. If achieved, this would be a much better result than the 4.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 9.3% per year. So it looks like HeveaBoard Berhad is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for HeveaBoard Berhad. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of HeveaBoard Berhad's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for HeveaBoard Berhad going out as far as 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for HeveaBoard Berhad 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.