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The analyst covering Pacific Radiance Ltd. (SGX:RXS) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.
After this downgrade, Pacific Radiance's lone analyst is now forecasting revenues of US$49m in 2025. This would be a notable 12% improvement in sales compared to the last 12 months. Statutory earnings per share are anticipated to plummet 78% to US$0.004 in the same period. Before this latest update, the analyst had been forecasting revenues of US$56m and earnings per share (EPS) of US$0.027 in 2025. Indeed, we can see that the analyst is a lot more bearish about Pacific Radiance's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
Check out our latest analysis for Pacific Radiance
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Pacific Radiance's past performance and to peers in the same industry. For example, we noticed that Pacific Radiance's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 6.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.8% annually. Not only are Pacific Radiance's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the serious cut to this year's outlook, it's clear that the analyst has turned more bearish on Pacific Radiance, and we wouldn't blame shareholders for feeling a little more cautious themselves.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Pacific Radiance, including concerns around earnings quality. For more information, you can click here to discover this and the 1 other risk we've identified.