Greatech Technology Berhad’s Share Price Rises Despite Downgraded Forecasts
Shares of Greatech Technology Berhad (KLSE:GREATEC) saw a commendable 7.5% increase this week, closing at RM1.73, following the release of its quarterly financial results. However, the company’s revenues of RM175 million fell short of analysts’ expectations by 31%, while earnings per share stood at RM0.062, aligning with forecasts.
In light of these results, analysts have revisited their earnings outlook for the company. The consensus among nine analysts indicates projected revenues of RM795.9 million for 2025—a modest 2.6% increase compared to the previous year. This marks a decrease from earlier estimates of RM832.4 million. Similarly, the earnings per share forecast has been slightly adjusted downwards to RM0.063, reflecting a general reduction in growth expectations.
Despite these downward revisions, analysts maintained the price target at RM1.99, suggesting that they do not foresee significant changes to the company’s intrinsic value. The range of price targets varies widely; the most optimistic analyst values the stock at RM2.57, while the most cautious estimates it at RM1.50, indicating differing views on the company’s future.
However, concerns linger as Greatech’s projected annual growth rate of 3.5% until 2025 is notably lower than the robust 25% growth seen over the past five years and also falls short when compared to an industry average growth of 10%.
Overall, while there’s no drastic change to price targets, the downgrades in revenue and earnings forecasts hint at potential challenges ahead for Greatech. Investors are urged to remain vigilant and consider long-term strategies, especially given two identified warning signs regarding the company’s outlook.
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