Middle East Healthcare Company (TADAWUL:4009) Second-Quarter Results Just Came Out: Here's What Analysts Are Forecasting For This Year

One of the biggest stories of last week was how Middle East Healthcare Company (TADAWUL:4009) shares plunged 20% in the week since its latest second-quarter results, closing yesterday at ر.س61.60. Results overall were respectable, with statutory earnings of ر.س1.96 per share roughly in line with what the analysts had forecast. Revenues of ر.س713m came in 2.3% ahead of analyst predictions. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Middle East Healthcare after the latest results.

View our latest analysis for Middle East Healthcare

Taking into account the latest results, the current consensus from Middle East Healthcare's seven analysts is for revenues of ر.س2.93b in 2024. This would reflect an okay 5.0% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 14% to ر.س2.51. Before this earnings report, the analysts had been forecasting revenues of ر.س3.04b and earnings per share (EPS) of ر.س2.63 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the ر.س91.40 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Middle East Healthcare, with the most bullish analyst valuing it at ر.س102 and the most bearish at ر.س75.00 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that Middle East Healthcare's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. Factoring in the forecast slowdown in growth, it seems obvious that Middle East Healthcare is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

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..

And what about risks? Every company has them, and we've spotted 2 warning signs for Middle East Healthcare (of which 1 can't be ignored!) you should know about.

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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.