Adrad Holdings Limited Just Recorded A 9.7% EPS Beat: Here's What Analysts Are Forecasting Next
It's been a good week for Adrad Holdings Limited (ASX:AHL) shareholders, because the company has just released its latest annual results, and the shares gained 7.7% to AU$1.26. Adrad Holdings reported AU$157m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of AU$0.08 beat expectations, being 9.7% higher than what the analyst expected. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Adrad Holdings after the latest results.
Following the latest results, Adrad Holdings' lone analyst are now forecasting revenues of AU$161.6m in 2027. This would be an okay 3.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 13% to AU$0.093. Before this earnings report, the analyst had been forecasting revenues of AU$167.1m and earnings per share (EPS) of AU$0.083 in 2027. While revenue forecasts have been revised downwards, the analyst looks to have become more optimistic on the company's cost base, given the substantial gain in to the earnings per share numbers.
Check out our latest analysis for Adrad Holdings
The consensus has made no major changes to the price target of AU$1.40, suggesting the forecast improvement in earnings is expected to offset the decline in revenues next year.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Adrad Holdings' past performance and to peers in the same industry. We would highlight that Adrad Holdings' revenue growth is expected to slow, with the forecast 3.2% annualised growth rate until the end of 2027 being well below the historical 8.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.8% per year. Factoring in the forecast slowdown in growth, it seems obvious that Adrad Holdings is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Adrad Holdings' earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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 Adrad Holdings. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2029, which can be seen for free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Adrad Holdings that you should be aware of.
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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.