Civmec Limited (SGX:P9D) investors will be delighted, with the company turning in some strong numbers with its latest results. It was overall a positive result, with revenues beating expectations by 4.2% to hit AU$809m. Civmec reported statutory earnings per share (EPS) AU$0.10, which was a notable 12% above what the analysts had forecast. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Civmec after the latest results.

View our latest analysis for Civmec

Taking into account the latest results, the consensus forecast from Civmec's three analysts is for revenues of AU$831.2m in 2023, which would reflect a credible 2.7% improvement in sales compared to the last 12 months. Statutory per-share earnings are expected to be AU$0.10, roughly flat on the last 12 months. Before this earnings report, the analysts had been forecasting revenues of AU$848.3m and earnings per share (EPS) of AU$0.087 in 2023. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the decent improvement in to the earnings per share numbers.

The consensus has made no major changes to the price target of S$0.96, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Civmec analyst has a price target of S$1.03 per share, while the most pessimistic values it at S$0.86. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

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. It's pretty clear that there is an expectation that Civmec's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 8.7% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Civmec is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Civmec following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. The consensus price target held steady at S$0.96, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Civmec. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Civmec analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that Civmec is showing 1 warning sign in our investment analysis , you should know about...

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.