It's shaping up to be a tough period for Taliworks Corporation Berhad (KLSE:TALIWRK), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of RM338m missed by 19%, and statutory earnings per share of RM0.027 fell short of forecasts by 7.9%. 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 Taliworks Corporation Berhad

Following the latest results, Taliworks Corporation Berhad's four analysts are now forecasting revenues of RM542.8m in 2023. This would be a substantial 61% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 26% to RM0.035. In the lead-up to this report, the analysts had been modelling revenues of RM590.7m and earnings per share (EPS) of RM0.039 in 2023. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

The analysts made no major changes to their price target of RM0.96, suggesting the downgrades are not expected to have a long-term impact on Taliworks Corporation Berhad's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Taliworks Corporation Berhad, with the most bullish analyst valuing it at RM1.06 and the most bearish at RM0.86 per share. This is a very narrow spread of estimates, implying either that Taliworks Corporation Berhad is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Taliworks Corporation Berhad's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 61% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 5.3% 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 10% annually. Not only are Taliworks Corporation Berhad'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 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Taliworks Corporation Berhad going out to 2025, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Taliworks Corporation Berhad (of which 1 doesn't sit too well with us!) 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.

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