Latest news with #GreatechTechnologyBerhad
Yahoo
6 days ago
- Business
- Yahoo
Greatech Technology Berhad's (KLSE:GREATEC) Solid Earnings May Rest On Weak Foundations
Following the solid earnings report from Greatech Technology Berhad (KLSE:GREATEC), the market responded by bidding up the stock price. While the profit numbers were good, our analysis has found some concerning factors that shareholders should be aware of. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. As a result, a negative accrual ratio is a positive for the company, and a positive accrual ratio is a negative. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". Greatech Technology Berhad has an accrual ratio of 0.30 for the year to March 2025. Unfortunately, that means its free cash flow was a lot less than its statutory profit, which makes us doubt the utility of profit as a guide. Even though it reported a profit of RM159.9m, a look at free cash flow indicates it actually burnt through RM39m in the last year. We saw that FCF was RM36m a year ago though, so Greatech Technology Berhad has at least been able to generate positive FCF in the past. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Greatech Technology Berhad's accrual ratio for the last twelve months signifies cash conversion is less than ideal, which is a negative when it comes to our view of its earnings. Therefore, it seems possible to us that Greatech Technology Berhad's true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 29% per annum growth in EPS for the last three. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. So while earnings quality is important, it's equally important to consider the risks facing Greatech Technology Berhad at this point in time. To help with this, we've discovered 2 warning signs (1 is significant!) that you ought to be aware of before buying any shares in Greatech Technology Berhad. This note has only looked at a single factor that sheds light on the nature of Greatech Technology Berhad's profit. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
30-05-2025
- Business
- Yahoo
Greatech Technology Berhad Recorded A 31% Miss On Revenue: Analysts Are Revisiting Their Models
Investors in Greatech Technology Berhad (KLSE:GREATEC) had a good week, as its shares rose 7.5% to close at RM1.73 following the release of its quarterly results. Revenues were RM175m, 31% shy of what the analysts were expecting, although statutory earnings of RM0.062 per share were roughly in line with what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Taking into account the latest results, the current consensus from Greatech Technology Berhad's nine analysts is for revenues of RM795.9m in 2025. This would reflect a modest 2.6% increase on its revenue over the past 12 months. Statutory per share are forecast to be RM0.063, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM832.4m and earnings per share (EPS) of RM0.068 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations. Check out our latest analysis for Greatech Technology Berhad Despite the cuts to forecast earnings, there was no real change to the RM1.99 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Greatech Technology Berhad, with the most bullish analyst valuing it at RM2.57 and the most bearish at RM1.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure. Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Greatech Technology Berhad's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2025 being well below the historical 25% 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 10.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Greatech Technology Berhad is also expected to grow slower than other industry participants. The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Greatech Technology Berhad. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at RM1.99, with the latest estimates not enough to have an impact on their price targets. Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Greatech Technology Berhad going out to 2027, and you can see them free on our platform here. You should always think about risks though. Case in point, we've spotted 2 warning signs for Greatech Technology Berhad you should be aware of, and 1 of them is concerning. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
Yahoo
30-05-2025
- Business
- Yahoo
Greatech Technology Berhad Recorded A 31% Miss On Revenue: Analysts Are Revisiting Their Models
Investors in Greatech Technology Berhad (KLSE:GREATEC) had a good week, as its shares rose 7.5% to close at RM1.73 following the release of its quarterly results. Revenues were RM175m, 31% shy of what the analysts were expecting, although statutory earnings of RM0.062 per share were roughly in line with what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. Taking into account the latest results, the current consensus from Greatech Technology Berhad's nine analysts is for revenues of RM795.9m in 2025. This would reflect a modest 2.6% increase on its revenue over the past 12 months. Statutory per share are forecast to be RM0.063, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of RM832.4m and earnings per share (EPS) of RM0.068 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations. Check out our latest analysis for Greatech Technology Berhad Despite the cuts to forecast earnings, there was no real change to the RM1.99 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Greatech Technology Berhad, with the most bullish analyst valuing it at RM2.57 and the most bearish at RM1.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure. Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Greatech Technology Berhad's revenue growth is expected to slow, with the forecast 3.5% annualised growth rate until the end of 2025 being well below the historical 25% 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 10.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Greatech Technology Berhad is also expected to grow slower than other industry participants. The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Greatech Technology Berhad. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at RM1.99, with the latest estimates not enough to have an impact on their price targets. Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Greatech Technology Berhad going out to 2027, and you can see them free on our platform here. You should always think about risks though. Case in point, we've spotted 2 warning signs for Greatech Technology Berhad you should be aware of, and 1 of them is concerning. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
Yahoo
19-03-2025
- Business
- Yahoo
Greatech Technology Berhad's (KLSE:GREATEC) Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?
With its stock down 33% over the past three months, it is easy to disregard Greatech Technology Berhad (KLSE:GREATEC). However, stock prices are usually driven by a company's financial performance over the long term, which in this case looks quite promising. In this article, we decided to focus on Greatech Technology Berhad's ROE. Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders. View our latest analysis for Greatech Technology Berhad The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for Greatech Technology Berhad is: 17% = RM155m ÷ RM909m (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. That means that for every MYR1 worth of shareholders' equity, the company generated MYR0.17 in profit. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. So far, we've learned that ROE is a measure of a company's profitability. Based on how much of its profits the company chooses to reinvest or "retain", we are then able to evaluate a company's future ability to generate profits. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. At first glance, Greatech Technology Berhad seems to have a decent ROE. Especially when compared to the industry average of 4.6% the company's ROE looks pretty impressive. This probably laid the ground for Greatech Technology Berhad's moderate 16% net income growth seen over the past five years. We then compared Greatech Technology Berhad's net income growth with the industry and we're pleased to see that the company's growth figure is higher when compared with the industry which has a growth rate of 1.5% in the same 5-year period. The basis for attaching value to a company is, to a great extent, tied to its earnings growth. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. Doing so will help them establish if the stock's future looks promising or ominous. If you're wondering about Greatech Technology Berhad's's valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry. Greatech Technology Berhad doesn't pay any regular dividends, meaning that all of its profits are being reinvested in the business, which explains the fair bit of earnings growth the company has seen. In total, we are pretty happy with Greatech Technology Berhad's performance. In particular, it's great to see that the company is investing heavily into its business and along with a high rate of return, that has resulted in a sizeable growth in its earnings. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. Are these analysts expectations based on the broad expectations for the industry, or on the company's fundamentals? Click here to be taken to our analyst's forecasts page for the company. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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.
