Analysts Are Updating Their Saudi Telecom Company (TADAWUL:7010) Estimates After Its Second-Quarter Results

Saudi Telecom Company (TADAWUL:7010) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It was an okay result overall, with revenues coming in at ر.س17b, roughly what the analysts had been expecting. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Saudi Telecom

Taking into account the latest results, the consensus forecast from Saudi Telecom's eight analysts is for revenues of ر.س68.4b in 2022, which would reflect a credible 4.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to increase 6.5% to ر.س6.09. In the lead-up to this report, the analysts had been modelling revenues of ر.س67.6b and earnings per share (EPS) of ر.س6.06 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at ر.س122. 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 Saudi Telecom at ر.س138 per share, while the most bearish prices it at ر.س88.60. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Saudi Telecom's growth to accelerate, with the forecast 8.1% annualised growth to the end of 2022 ranking favourably alongside historical growth of 5.7% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.5% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Saudi Telecom is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at ر.س122, 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. At Simply Wall St, we have a full range of analyst estimates for Saudi Telecom going out to 2024, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Saudi Telecom that you need to be mindful of.

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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.