Eco World Development Group Berhad Just Missed Earnings - But Analysts Have Updated Their Models

Eco World Development Group Berhad (KLSE:ECOWLD) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of RM2.0b missed by 20%, and statutory earnings per share of RM0.053 fell short of forecasts by 28%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Eco World Development Group Berhad

After the latest results, the seven analysts covering Eco World Development Group Berhad are now predicting revenues of RM2.30b in 2023. If met, this would reflect a meaningful 13% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 53% to RM0.082. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM2.33b and earnings per share (EPS) of RM0.082 in 2023. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at RM0.81. 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. Currently, the most bullish analyst values Eco World Development Group Berhad at RM0.95 per share, while the most bearish prices it at RM0.69. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Eco World Development Group Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 13% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 5.3% 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 2.7% annually. Not only are Eco World Development Group Berhad's revenues expected to improve, it seems that the analysts are also expecting it 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 the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. 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 Eco World Development Group Berhad. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Eco World Development Group Berhad going out to 2025, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Eco World Development Group Berhad .

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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.