Revenue Beat: Q & M Dental Group (Singapore) Limited Beat Analyst Estimates By 18%

It's been a good week for Q & M Dental Group (Singapore) Limited (SGX:QC7) shareholders, because the company has just released its latest quarterly results, and the shares gained 4.0% to S$0.65. It was a mildly positive result, with revenues exceeding expectations at S$44m, while statutory earnings per share (EPS) of S$0.025 were in line with analyst forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Q & M Dental Group (Singapore)

Taking into account the latest results, the current consensus from Q & M Dental Group (Singapore)'s four analysts is for revenues of S$215.0m in 2021, which would reflect a substantial 42% increase on its sales over the past 12 months. Statutory earnings per share are predicted to surge 83% to S$0.046. In the lead-up to this report, the analysts had been modelling revenues of S$205.8m and earnings per share (EPS) of S$0.045 in 2021. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.

It may not be a surprise to see thatthe analysts have reconfirmed their price target of S$0.78, implying that the uplift in sales is not expected to greatly contribute to Q & M Dental Group (Singapore)'s valuation in the near term. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Q & M Dental Group (Singapore) analyst has a price target of S$0.97 per share, while the most pessimistic values it at S$0.54. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Q & M Dental Group (Singapore) shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Q & M Dental Group (Singapore)'s rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 59% growth to the end of 2021 on an annualised basis. That is well above its historical decline of 1.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 16% per year. So it looks like Q & M Dental Group (Singapore) is expected to grow faster than its competitors, at least for a while.

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. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at S$0.78, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Q & M Dental Group (Singapore) going out to 2023, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Q & M Dental Group (Singapore) you should be aware 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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