Saudi Tadawul Group Holding Company Just Missed Revenue By 14%: Here's What Analysts Think Will Happen Next

Last week saw the newest first-quarter earnings release from Saudi Tadawul Group Holding Company (TADAWUL:1111), an important milestone in the company's journey to build a stronger business. Revenues were ر.س182m, 14% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of ر.س3.54 being in line with what the analysts anticipated. 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.

View our latest analysis for Saudi Tadawul Group Holding

After the latest results, the five analysts covering Saudi Tadawul Group Holding are now predicting revenues of ر.س1.02b in 2023. If met, this would reflect a solid 8.3% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be ر.س2.85, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of ر.س1.00b and earnings per share (EPS) of ر.س2.39 in 2023. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the solid gain to earnings per share expectations following these results.

The consensus price target was unchanged at ر.س153, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Saudi Tadawul Group Holding analyst has a price target of ر.س185 per share, while the most pessimistic values it at ر.س124. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Saudi Tadawul Group Holding's past performance and to peers in the same industry. For example, we noticed that Saudi Tadawul Group Holding's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 11% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 15% a year over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 10.0% annually. So while Saudi Tadawul Group Holding's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Saudi Tadawul Group Holding following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at ر.س153, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Saudi Tadawul Group Holding. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Saudi Tadawul Group Holding going 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 Tadawul Group Holding 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.