Yahoo Finance Results: HRnetGroup Limited Exceeded Expectations And The Consensus Has Updated Its Estimates
It's been a good week for HRnetGroup Limited (SGX:CHZ) shareholders, because the company has just released its latest annual results, and the shares gained 3.5% to S$0.73. Revenues S$578m disappointed slightly, at2.8% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of S$0.064 coming in 13% above what was anticipated. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on HRnetGroup after the latest results.
See our latest analysis for HRnetGroup
Taking into account the latest results, the current consensus from HRnetGroup's four analysts is for revenues of S$594.4m in 2024. This would reflect a satisfactory 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are forecast to fall 12% to S$0.057 in the same period. Before this earnings report, the analysts had been forecasting revenues of S$625.4m and earnings per share (EPS) of S$0.063 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
The consensus price target fell 7.6% to S$0.83, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic HRnetGroup analyst has a price target of S$0.88 per share, while the most pessimistic values it at S$0.80. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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 HRnetGroup's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 9.5% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than HRnetGroup.
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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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 HRnetGroup'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 forecasts for HRnetGroup 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 HRnetGroup (at least 1 which is potentially serious) , and understanding these should be part of your investment process.
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.
