News Flash: 5 Analysts Think PropNex Limited (SGX:OYY) Earnings Are Under Threat

The latest analyst coverage could presage a bad day for PropNex Limited (SGX:OYY), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, PropNex's five analysts are now forecasting revenues of S$861m in 2024. This would be a reasonable 2.8% improvement in sales compared to the last 12 months. Per-share earnings are expected to swell 11% to S$0.072. Before this latest update, the analysts had been forecasting revenues of S$1.0b and earnings per share (EPS) of S$0.087 in 2024. Indeed, we can see that the analysts are a lot more bearish about PropNex's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for PropNex

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to S$1.03.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the PropNex's past performance and to peers in the same industry. We would highlight that PropNex's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 21% p.a. growth over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 0.05% per year. So it's clear that despite the slowdown in growth, PropNex is still expected to grow meaningfully faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for PropNex. Unfortunately, they also downgraded their revenue estimates, and our data indicates sales are expected to outperform the wider market. Even so, earnings per share are more important to the intrinsic value of the business. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of PropNex.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for PropNex going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.