Inari Amertron Berhad Just Missed Earnings - But Analysts Have Updated Their Models

Shareholders of Inari Amertron Berhad (KLSE:INARI) will be pleased this week, given that the stock price is up 13% to RM2.56 following its latest full-year results. Statutory earnings per share fell badly short of expectations, coming in at RM0.034, some 32% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at RM1.2b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

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After the latest results, the 17 analysts covering Inari Amertron Berhad are now predicting revenues of RM1.41b in 2027. If met, this would reflect a meaningful 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 106% to RM0.069. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM1.42b and earnings per share (EPS) of RM0.07 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

See our latest analysis for Inari Amertron Berhad

Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.9% to RM2.59, suggesting the revised estimates are not indicative of a weaker long-term future for the business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Inari Amertron Berhad, with the most bullish analyst valuing it at RM3.40 and the most bearish at RM1.85 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Inari Amertron Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 19% growth to the end of 2027 on an annualised basis. That is well above its historical decline of 4.1% a year 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 revenue grow 16% per year. So it looks like Inari Amertron Berhad is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Inari Amertron Berhad going out to 2029, and you can see them free on our platform here.

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

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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.