Greatech Technology Berhad Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Investors in Greatech Technology Berhad (KLSE:GREATEC) had a good week, as its shares rose 4.6% to close at RM2.05 following the release of its quarterly results. Revenues were RM175m, 31% shy of what the analysts were expecting, although statutory earnings of RM0.062 per share were roughly in line with what was forecast. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from Greatech Technology Berhad's nine analysts is for revenues of RM831.5m in 2025. This would reflect a modest 3.6% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 15% to RM0.063. Before this earnings report, the analysts had been forecasting revenues of RM812.1m and earnings per share (EPS) of RM0.062 in 2025. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

See our latest analysis for Greatech Technology Berhad

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of RM2.20, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. The most optimistic Greatech Technology Berhad analyst has a price target of RM2.65 per share, while the most pessimistic values it at RM1.50. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 4.8% annualised growth rate until the end of 2025 being well below the historical 23% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.0% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Greatech Technology Berhad.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Greatech Technology Berhad's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. The consensus price target held steady at RM2.20, 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 still need to take note of risks, for example - Greatech Technology Berhad has 2 warning signs (and 1 which shouldn't be ignored) 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.