Arabian Internet and Communication Services Company Just Missed Earnings - But Analysts Have Updated Their Models

Arabian Internet and Communication Services Company (TADAWUL:7202) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of ر.س11b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at ر.س9.93, missing estimates by 10.0%. 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. 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 Arabian Internet and Communication Services

After the latest results, the 13 analysts covering Arabian Internet and Communication Services are now predicting revenues of ر.س12.4b in 2024. If met, this would reflect a notable 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 22% to ر.س12.24. In the lead-up to this report, the analysts had been modelling revenues of ر.س12.5b and earnings per share (EPS) of ر.س12.73 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at ر.س348, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Arabian Internet and Communication Services at ر.س396 per share, while the most bearish prices it at ر.س278. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 Arabian Internet and Communication Services' revenue growth is expected to slow, with the forecast 12% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.9% annually. So it's pretty clear that, while Arabian Internet and Communication Services' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at ر.س348, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple Arabian Internet and Communication Services analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Arabian Internet and Communication Services' Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.