UMS Holdings Limited (SGX:558) shares fell 8.7% to S$0.94 in the week since its latest full-year results. It was a pretty mixed result, with revenues beating expectations to hit S$132m. Statutory earnings fell 3.5% short of analyst forecasts, reaching S$0.063 per share. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on UMS Holdings after the latest results.
Taking into account the latest results, the latest consensus from UMS Holdings's three analysts is for revenues of S$151.4m in 2020, which would reflect a decent 15% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to soar 30% to S$0.082. Before this earnings report, analysts had been forecasting revenues of S$142.3m and earnings per share (EPS) of S$0.08 in 2020. It looks like there's been a modest increase in sentiment following the latest results, with analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades, analysts have not made any major changes to their price target of S$1.11, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on UMS Holdings, with the most bullish analyst valuing it at S$1.13 and the most bearish at S$1.08 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the UMS Holdings's past performance and to peers in the same market. It's clear from the latest estimates that UMS Holdings's rate of growth is expected to accelerate meaningfully, with forecast 15% revenue growth noticeably faster than its historical growth of 5.6%p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that UMS Holdings is expected to grow at about the same rate as the wider market.
The Bottom Line
The biggest takeaway for us from these new estimates is that the consensus upgraded its earnings per share estimates, showing a clear improvement in sentiment around UMS Holdings's earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 UMS Holdings going out to 2022, and you can see them free on our platform here..
We also provide an overview of the UMS Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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