Perak Transit Berhad (KLSE:PTRANS) Just Reported Yearly Earnings: Have Analysts Changed Their Mind On The Stock?

Perak Transit Berhad (KLSE:PTRANS) shareholders are probably feeling a little disappointed, since its shares fell 8.1% to RM0.57 in the week after its latest full-year results. Revenues came in 4.0% below expectations, at RM139m. Statutory earnings per share were relatively better off, with a per-share profit of RM0.084 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Perak Transit Berhad

After the latest results, the three analysts covering Perak Transit Berhad are now predicting revenues of RM158.8m in 2022. If met, this would reflect a meaningful 15% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to decrease 4.0% to RM0.081 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM159.1m and earnings per share (EPS) of RM0.084 in 2022. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at RM1.04, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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. Currently, the most bullish analyst values Perak Transit Berhad at RM1.16 per share, while the most bearish prices it at RM0.85. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Perak Transit Berhad's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 6.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 8.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Perak Transit Berhad is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Perak Transit Berhad. 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. The consensus price target held steady at RM1.04, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Perak Transit Berhad analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Perak Transit Berhad that we have uncovered.

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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.