Advertisement

Here's What Analysts Are Forecasting For WCT Holdings Berhad (KLSE:WCT) After Its Third-Quarter Results

It's been a good week for WCT Holdings Berhad (KLSE:WCT) shareholders, because the company has just released its latest third-quarter results, and the shares gained 4.7% to RM0.45. Revenues were RM470m, with WCT Holdings Berhad reporting some 2.6% below analyst expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 WCT Holdings Berhad

earnings-and-revenue-growth
earnings-and-revenue-growth

Taking into account the latest results, the most recent consensus for WCT Holdings Berhad from nine analysts is for revenues of RM2.26b in 2023 which, if met, would be a meaningful 13% increase on its sales over the past 12 months. Statutory earnings per share are expected to dive 63% to RM0.052 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM2.41b and earnings per share (EPS) of RM0.053 in 2023. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was steady at RM0.52even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic WCT Holdings Berhad analyst has a price target of RM0.59 per share, while the most pessimistic values it at RM0.42. 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.

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. One thing stands out from these estimates, which is that WCT Holdings Berhad is forecast to grow faster in the future than it has in the past, with revenues expected to display 9.9% annualised growth until the end of 2023. If achieved, this would be a much better result than the 3.4% annual decline 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 revenue grow 13% per year. So although WCT Holdings Berhad's revenue growth is expected to improve, it is still expected to grow slower than the 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at RM0.52, 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 WCT Holdings Berhad going out to 2024, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for WCT Holdings Berhad (1 makes us a bit uncomfortable!) that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here