Mr D.I.Y. Group (M) Berhad Just Missed EPS By 41%: Here's What Analysts Think Will Happen Next

As you might know, Mr D.I.Y. Group (M) Berhad (KLSE:MRDIY) last week released its latest second-quarter, and things did not turn out so great for shareholders. Unfortunately, Mr D.I.Y. Group (M) Berhad delivered a serious earnings miss. Revenues of RM760m were 17% below expectations, and statutory earnings per share of RM0.013 missed estimates by 41%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Mr D.I.Y. Group (M) Berhad

Taking into account the latest results, the most recent consensus for Mr D.I.Y. Group (M) Berhad from twelve analysts is for revenues of RM3.41b in 2021 which, if met, would be a notable 8.6% increase on its sales over the past 12 months. Statutory earnings per share are predicted to increase 9.4% to RM0.074. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM3.54b and earnings per share (EPS) of RM0.082 in 2021. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of RM4.34, suggesting the downgrades are not expected to have a long-term impact on Mr D.I.Y. Group (M) Berhad's 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. Currently, the most bullish analyst values Mr D.I.Y. Group (M) Berhad at RM5.00 per share, while the most bearish prices it at RM4.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Mr D.I.Y. Group (M) Berhad's revenue growth is expected to slow, with the forecast 18% annualised growth rate until the end of 2021 being well below the historical 41% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% annually. So it's pretty clear that, while Mr D.I.Y. Group (M) Berhad's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target held steady at RM4.34, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Mr D.I.Y. Group (M) Berhad going out to 2023, and you can see them free on our platform here.

It might also be worth considering whether Mr D.I.Y. Group (M) Berhad's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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