Dialog Group Berhad Beat Revenue Forecasts By 9.8%: Here's What Analysts Are Forecasting Next

Last week, you might have seen that Dialog Group Berhad (KLSE:DIALOG) released its full-year result to the market. The early response was not positive, with shares down 2.2% to RM2.21 in the past week. Results overall were respectable, with statutory earnings of RM0.09 per share roughly in line with what the analysts had forecast. Revenues of RM3.0b came in 9.8% ahead of analyst predictions. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Dialog Group Berhad

Taking into account the latest results, Dialog Group Berhad's 14 analysts currently expect revenues in 2024 to be RM2.95b, approximately in line with the last 12 months. Per-share earnings are expected to rise 5.8% to RM0.096. Before this earnings report, the analysts had been forecasting revenues of RM2.91b and earnings per share (EPS) of RM0.10 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at RM2.98, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. The most optimistic Dialog Group Berhad analyst has a price target of RM4.90 per share, while the most pessimistic values it at RM2.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing that stands out from these estimates is that revenues are expected to keep falling until the end of 2024, roughly in line with the historical decline of 1.6% per annum 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 shrink 3.3% per year. So it's pretty clear that, although revenues are shrinking, at least Dialog Group Berhad'sthey are expected to decline at a slower rate 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 estimates, suggesting that it's tracking in line with expectations. Their estimates also suggest that Dialog Group Berhad's revenue is expected to perform better 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 Dialog Group Berhad. Long-term earnings power is much more important than next year's profits. We have forecasts for Dialog Group Berhad going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Dialog Group Berhad's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.