Earnings Beat: Hextar Global Berhad Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

A week ago, Hextar Global Berhad (KLSE:HEXTAR) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. Hextar Global Berhad delivered a significant beat with revenue hitting RM669m and statutory EPS reaching RM0.015, both beating estimates by more than 10%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Hextar Global Berhad

Following the recent earnings report, the consensus from two analysts covering Hextar Global Berhad is for revenues of RM603.8m in 2024. This implies an uncomfortable 9.8% decline in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 6.7% to RM0.016. In the lead-up to this report, the analysts had been modelling revenues of RM633.7m and earnings per share (EPS) of RM0.014 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a decent improvement in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The average price target increased 5.2% to RM0.71, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 9.8% by the end of 2024. This indicates a significant reduction from annual growth of 17% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 5.0% per year. It's pretty clear that Hextar Global Berhad's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Hextar Global Berhad following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Hextar Global Berhad going out as far as 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Hextar Global Berhad has 2 warning signs we think you should be aware of.

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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.