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Earnings Update: Top Glove Corporation Bhd. (KLSE:TOPGLOV) Just Reported And Analysts Are Trimming Their Forecasts

As you might know, Top Glove Corporation Bhd. (KLSE:TOPGLOV) recently reported its second-quarter numbers. It wasn't the greatest result, with ongoing losses and revenues of RM550m falling short of analyst predictions. The losses were a relative bright spot though, with a per-share statutory loss of RM0.0064 being moderately smaller than the analysts forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Top Glove Corporation Bhd

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Taking into account the latest results, the current consensus from Top Glove Corporation Bhd's 19 analysts is for revenues of RM2.86b in 2024. This would reflect a sizeable 39% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 83% to RM0.015. Yet prior to the latest earnings, the analysts had been forecasting revenues of RM3.16b and losses of RM0.0064 per share in 2024. While this year's revenue estimates dropped there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

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The average price target was broadly unchanged at RM0.80, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Top Glove Corporation Bhd analyst has a price target of RM1.10 per share, while the most pessimistic values it at RM0.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Top Glove Corporation Bhd's past performance and to peers in the same industry. For example, we noticed that Top Glove Corporation Bhd's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 94% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 9.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 15% per year. Not only are Top Glove Corporation Bhd's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Top Glove Corporation Bhd. They also downgraded Top Glove Corporation Bhd's revenue estimates, but industry data suggests that it is expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Top Glove Corporation Bhd. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Top Glove Corporation Bhd going out to 2026, and you can see them free on our platform here..

We also provide an overview of the Top Glove Corporation Bhd Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.