Farm Fresh Berhad Just Missed Earnings - But Analysts Have Updated Their Models

Last week, you might have seen that Farm Fresh Berhad (KLSE:FFB) released its first-quarter result to the market. The early response was not positive, with shares down 7.1% to RM1.97 in the past week. Statutory earnings per share fell badly short of expectations, coming in at RM0.014, some 22% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at RM306m. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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After the latest results, the 13 analysts covering Farm Fresh Berhad are now predicting revenues of RM1.28b in 2027. If met, this would reflect a decent 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 15% to RM0.076. Before this earnings report, the analysts had been forecasting revenues of RM1.29b and earnings per share (EPS) of RM0.079 in 2027. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Farm Fresh Berhad

The average price target fell 5.2% to RM2.46, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values Farm Fresh Berhad at RM2.91 per share, while the most bearish prices it at RM2.05. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. We would highlight that Farm Fresh Berhad's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2027 being well below the historical 19% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.0% annually. Even after the forecast slowdown in growth, it seems obvious that Farm Fresh Berhad is also expected to grow faster than 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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Farm Fresh Berhad's future valuation.

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

Even so, be aware that Farm Fresh Berhad is showing 2 warning signs 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.