It's been a good week for Aztech Global Ltd. (SGX:8AZ) shareholders, because the company has just released its latest annual results, and the shares gained 9.5% to S$0.92. Aztech Global reported S$896m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of S$0.13 beat expectations, being 2.2% higher than what the analysts expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Aztech Global's four analysts are now forecasting revenues of S$975.7m in 2024. This would be a solid 8.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 9.9% to S$0.14. Before this earnings report, the analysts had been forecasting revenues of S$988.0m and earnings per share (EPS) of S$0.14 in 2024. So the consensus seems to have become somewhat more optimistic on Aztech Global's earnings potential following these results.
There's been no major changes to the consensus price target of S$1.13, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Aztech Global analyst has a price target of S$1.23 per share, while the most pessimistic values it at S$1.05. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Aztech Global's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 8.9% growth on an annualised basis. This is compared to a historical growth rate of 20% 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 14% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Aztech Global.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Aztech Global's earnings potential next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Aztech Global analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Aztech Global (1 makes us a bit uncomfortable!) that you should be aware of.
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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.