Earnings Miss: Greatech Technology Berhad Missed EPS By 5.4% And Analysts Are Revising Their Forecasts

Greatech Technology Berhad (KLSE:GREATEC) shareholders are probably feeling a little disappointed, since its shares fell 8.2% to RM1.79 in the week after its latest yearly results. Revenues of RM752m were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at RM0.062, missing estimates by 5.4%. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Greatech Technology Berhad

Taking into account the latest results, the current consensus from Greatech Technology Berhad's ten analysts is for revenues of RM863.0m in 2025. This would reflect a decent 15% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 8.6% to RM0.067. Before this earnings report, the analysts had been forecasting revenues of RM870.5m and earnings per share (EPS) of RM0.075 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.

The consensus price target held steady at RM2.45, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Greatech Technology Berhad, with the most bullish analyst valuing it at RM3.08 and the most bearish at RM1.95 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 Greatech Technology Berhad's revenue growth is expected to slow, with the forecast 15% annualised growth rate until the end of 2025 being well below the historical 26% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. Factoring in the forecast slowdown in growth, it looks like Greatech Technology Berhad is forecast to grow at about the same rate as 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. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at RM2.45, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Greatech Technology Berhad going out to 2027, and you can see them free on our platform here.

You can also see our analysis of Greatech Technology Berhad's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.