Time To Worry? Analysts Just Downgraded Their Supercomnet Technologies Berhad (KLSE:SCOMNET) Outlook

Today is shaping up negative for Supercomnet Technologies Berhad (KLSE:SCOMNET) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After the downgrade, the three analysts covering Supercomnet Technologies Berhad are now predicting revenues of RM147m in 2023. If met, this would reflect a satisfactory 4.7% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing RM165m of revenue in 2023. The consensus view seems to have become more pessimistic on Supercomnet Technologies Berhad, noting the measurable cut to revenue estimates in this update.

View our latest analysis for Supercomnet Technologies Berhad

The consensus price target fell 7.7% to RM1.55, with the analysts clearly less optimistic about Supercomnet Technologies Berhad's valuation following this update.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Supercomnet Technologies Berhad's past performance and to peers in the same industry. The period to the end of 2023 brings more of the same, according to the analysts, with revenue forecast to display 9.7% growth on an annualised basis. That is in line with its 11% annual growth 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 revenues grow 13% per year. So although Supercomnet Technologies Berhad is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Supercomnet Technologies Berhad this year. They also expect company revenue to perform worse than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Supercomnet Technologies Berhad's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Supercomnet Technologies Berhad after today.

Of course, there's always more to the story. At least one of Supercomnet Technologies Berhad's three analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.