Earnings Miss: ADES Holding Company Missed EPS By 33% And Analysts Are Revising Their Forecasts
Investors in ADES Holding Company (TADAWUL:2382) had a good week, as its shares rose 4.2% to close at ر.س8.71 following the release of its third-quarter results. It looks like a pretty bad result, all things considered. Although revenues of ر.س2.2b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 33% to hit ر.س0.04 per share. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the ten analysts covering ADES Holding are now predicting revenues of ر.س10.1b in 2027. If met, this would reflect a notable 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 103% to ر.س0.62. Before this earnings report, the analysts had been forecasting revenues of ر.س10.3b and earnings per share (EPS) of ر.س0.56 in 2027. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.
See our latest analysis for ADES Holding
The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.4% to ر.س11.64. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic ADES Holding analyst has a price target of ر.س24.25 per share, while the most pessimistic values it at ر.س6.90. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ADES Holding's past performance and to peers in the same industry. It's pretty clear that there is an expectation that ADES Holding's revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% annually. So it's pretty clear that, while ADES Holding's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards ADES Holding following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
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. At Simply Wall St, we have a full range of analyst estimates for ADES Holding going out to 2028, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for ADES Holding (1 is potentially serious!) that we have uncovered.
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