It's been a good week for StarHub Ltd (SGX:CC3) shareholders, because the company has just released its latest full-year results, and the shares gained 9.4% to S$1.16. It was a credible result overall, with revenues of S$2.4b and statutory earnings per share of S$0.082 both in line with analyst estimates, showing that StarHub is executing in line with expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, StarHub's twelve analysts currently expect revenues in 2024 to be S$2.38b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 4.1% to S$0.091. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$2.48b and earnings per share (EPS) of S$0.089 in 2024. 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 S$1.22even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. 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. There are some variant perceptions on StarHub, with the most bullish analyst valuing it at S$1.55 and the most bearish at S$0.95 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the StarHub's past performance and to peers in the same industry. The analysts are definitely expecting StarHub's growth to accelerate, with the forecast 0.2% annualised growth to the end of 2024 ranking favourably alongside historical growth of 0.05% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.9% per year. So it's clear that despite the acceleration in growth, StarHub is expected to grow meaningfully slower than the industry average.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to 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 S$1.22, with the latest estimates not enough to have an impact on their price targets.
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 StarHub analysts - going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with StarHub , and understanding these should be part of your investment process.
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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.