Saudi Ceramic Company Just Missed Revenue By 26%: Here's What Analysts Think Will Happen Next

The quarterly results for Saudi Ceramic Company (TADAWUL:2040) were released last week, making it a good time to revisit its performance. Saudi Ceramic reported a serious miss, with revenue of ر.س253m falling a huge 26% short of analyst estimates. The bright side is that statutory earnings per share of ر.س2.18 were in line with forecasts. 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.

Check out our latest analysis for Saudi Ceramic

Following last week's earnings report, Saudi Ceramic's three analysts are forecasting 2023 revenues to be ر.س1.39b, approximately in line with the last 12 months. Before this earnings report, the analysts had been forecasting revenues of ر.س1.41b and earnings per share (EPS) of ر.س2.20 in 2023. So we can see that while the consensus made no real change to its revenue estimates, it also no longer provides an earnings per share estimate. This suggests that revenues are what the market is focusing on after the latest results.

We'd also point out that thatthe analysts have made no major changes to their price target of ر.س30.57. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Saudi Ceramic at ر.س34.00 per share, while the most bearish prices it at ر.س27.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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 pretty clear that there is an expectation that Saudi Ceramic's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 2.2% growth on an annualised basis. This is compared to a historical growth rate of 7.3% over the past 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 Saudi Ceramic.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their revenue estimates for next year, suggesting that the business is performing in line with expectations. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

We have estimates for Saudi Ceramic from its three analysts out to 2025, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Saudi Ceramic that you need to take into consideration.

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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.