Earnings Miss: SLP Resources Berhad Missed EPS By 27% And Analysts Are Revising Their Forecasts

SLP Resources Berhad (KLSE:SLP) last week reported its latest full-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Statutory earnings per share fell badly short of expectations, coming in at RM0.034, some 27% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at RM162m. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for SLP Resources Berhad

After the latest results, the three analysts covering SLP Resources Berhad are now predicting revenues of RM181.2m in 2024. If met, this would reflect a solid 12% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 45% to RM0.049. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM182.0m and earnings per share (EPS) of RM0.057 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at RM0.81, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on SLP Resources Berhad, with the most bullish analyst valuing it at RM0.96 and the most bearish at RM0.73 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. For example, we noticed that SLP Resources Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.2% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 12% annually. So while SLP Resources Berhad's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall 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 reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on SLP Resources Berhad. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple SLP Resources Berhad analysts - going out to 2025, 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 SLP Resources Berhad you should be aware of, and 1 of them is a bit unpleasant.

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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.