Revenue Beat: Riyadh Cables Group Company Beat Analyst Estimates By 7.6%

Investors in Riyadh Cables Group Company (TADAWUL:4142) had a good week, as its shares rose 9.9% to close at ر.س70.00 following the release of its quarterly results. Results overall were respectable, with statutory earnings of ر.س2.35 per share roughly in line with what the analysts had forecast. Revenues of ر.س1.9b came in 7.6% ahead of analyst predictions. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Riyadh Cables Group

Following last week's earnings report, Riyadh Cables Group's two analysts are forecasting 2023 revenues to be ر.س7.60b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 8.8% to ر.س3.27. In the lead-up to this report, the analysts had been modelling revenues of ر.س6.51b and earnings per share (EPS) of ر.س2.64 in 2023. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 13% to ر.س58.50per share.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Riyadh Cables Group's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Riyadh Cables Group's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 2.6% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 19% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Riyadh Cables Group.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Riyadh Cables Group'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. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Riyadh Cables Group that you need to be mindful of.

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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.