Middle East Healthcare Company Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

The analysts might have been a bit too bullish on Middle East Healthcare Company (TADAWUL:4009), given that the company fell short of expectations when it released its first-quarter results last week. Results showed a clear earnings miss, with ر.س689m revenue coming in 5.1% lower than what the analystsexpected. Statutory earnings per share (EPS) of ر.س0.56 missed the mark badly, arriving some 26% below what was expected. 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.

See our latest analysis for Middle East Healthcare

Taking into account the latest results, the consensus forecast from Middle East Healthcare's four analysts is for revenues of ر.س3.01b in 2024. This reflects a solid 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 58% to ر.س3.12. Before this earnings report, the analysts had been forecasting revenues of ر.س2.98b and earnings per share (EPS) of ر.س2.81 in 2024. 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 rose 7.0% to ر.س90.07, suggesting that higher earnings estimates flow through to the stock's valuation as well. 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. There are some variant perceptions on Middle East Healthcare, with the most bullish analyst valuing it at ر.س100.00 and the most bearish at ر.س72.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 15% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 14% per year. So although Middle East Healthcare is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider 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 Middle East Healthcare following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Middle East Healthcare going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Middle East Healthcare 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.