Saudi Steel Pipes Company Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

As you might know, Saudi Steel Pipes Company (TADAWUL:1320) recently reported its quarterly numbers. Saudi Steel Pipes reported a serious miss, with revenue of ر.س336m falling a huge 22% short of analyst estimates. The bright side is that statutory earnings per share of ر.س3.54 were in line with forecasts. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from Saudi Steel Pipes' three analysts is for revenues of ر.س1.50b in 2025. This would reflect a major 42% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 14% to ر.س3.25. In the lead-up to this report, the analysts had been modelling revenues of ر.س1.63b and earnings per share (EPS) of ر.س4.08 in 2025. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Check out our latest analysis for Saudi Steel Pipes

The consensus price target fell 13% to ر.س50.97, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Saudi Steel Pipes, with the most bullish analyst valuing it at ر.س57.00 and the most bearish at ر.س46.90 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Saudi Steel Pipes' rate of growth is expected to accelerate meaningfully, with the forecast 103% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 30% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Saudi Steel Pipes is expected to grow much faster than its industry.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Saudi Steel Pipes' future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Saudi Steel Pipes going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Saudi Steel Pipes 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.