Earnings Miss: Eco World International Berhad Missed EPS By 88% And Analysts Are Revising Their Forecasts

Shareholders might have noticed that Eco World International Berhad (KLSE:EWINT) filed its yearly result this time last week. The early response was not positive, with shares down 4.5% to RM0.42 in the past week. Statutory earnings per share fell badly short of expectations, coming in at RM0.0057, some 88% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at RM573m. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Eco World International Berhad

After the latest results, the consensus from Eco World International Berhad's twin analysts is for revenues of RM115.5m in 2022, which would reflect a concerning 80% decline in sales compared to the last year of performance. Statutory earnings per share are expected to fall 12% to RM0.005 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM184.6m and earnings per share (EPS) of RM0.051 in 2022. It looks like sentiment has declined substantially in the aftermath of these results, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to RM0.45.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that sales are expected to reverse, with a forecast 80% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 81% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.8% annually for the foreseeable future. It's pretty clear that Eco World International Berhad's revenues are expected to perform substantially worse 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Eco World International Berhad's future valuation.

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 Eco World International Berhad going out as far as 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - Eco World International Berhad has 3 warning signs (and 2 which are concerning) we think you should know about.

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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.