Earnings Miss: ISDN Holdings Limited Missed EPS By 19% And Analysts Are Revising Their Forecasts

Investors in ISDN Holdings Limited (SGX:I07) had a good week, as its shares rose 3.4% to close at S$0.61 following the release of its yearly results. It was not a great result overall. Although revenues beat expectations, hitting S$362m, statutory earnings missed analyst forecasts by 19%, coming in at just S$0.035 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for ISDN Holdings

Taking into account the latest results, the most recent consensus for ISDN Holdings from twin analysts is for revenues of S$383.2m in 2021 which, if met, would be a satisfactory 5.9% increase on its sales over the past 12 months. Per-share earnings are expected to leap 63% to S$0.056. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$359.8m and earnings per share (EPS) of S$0.046 in 2021. So it seems there's been a definite increase in optimism about ISDN Holdings' future following the latest results, with a massive increase in the earnings per share forecasts in particular.

It will come as no surprise to learn that the analysts have increased their price target for ISDN Holdings 5.8% to S$0.66on the back of these upgrades.

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 can infer from the latest estimates that forecasts expect a continuation of ISDN Holdings'historical trends, as the 5.9% annualised revenue growth to the end of 2021 is roughly in line with the 6.3% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 19% per year. So although ISDN Holdings is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around ISDN Holdings' earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

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 least one analyst has provided forecasts out to 2023, which can be seen for 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 ISDN Holdings that you need to be mindful of.

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This article by Simply Wall St is general in nature. 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.
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