Latest news with #MaximGlobalBerhad
Yahoo
3 days ago
- Business
- Yahoo
Maxim Global Berhad (KLSE:MAXIM) Posted Healthy Earnings But There Are Some Other Factors To Be Aware Of
Unsurprisingly, Maxim Global Berhad's (KLSE:MAXIM) stock price was strong on the back of its healthy earnings report. However, our analysis suggests that shareholders may be missing some factors that indicate the earnings result was not as good as it looked. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. As finance nerds would already know, the accrual ratio from cashflow is a key measure for assessing how well a company's free cash flow (FCF) matches its profit. The accrual ratio subtracts the FCF from the profit for a given period, and divides the result by the average operating assets of the company over that time. You could think of the accrual ratio from cashflow as the 'non-FCF profit ratio'. That means a negative accrual ratio is a good thing, because it shows that the company is bringing in more free cash flow than its profit would suggest. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". Over the twelve months to March 2025, Maxim Global Berhad recorded an accrual ratio of 0.49. As a general rule, that bodes poorly for future profitability. To wit, the company did not generate one whit of free cashflow in that time. Over the last year it actually had negative free cash flow of RM286m, in contrast to the aforementioned profit of RM28.1m. Coming off the back of negative free cash flow last year, we imagine some shareholders might wonder if its cash burn of RM286m, this year, indicates high risk. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Maxim Global Berhad. As we discussed above, we think Maxim Global Berhad's earnings were not supported by free cash flow, which might concern some investors. For this reason, we think that Maxim Global Berhad's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But the happy news is that, while acknowledging we have to look beyond the statutory numbers, those numbers are still improving, with EPS growing at a very high rate over the last year. The goal of this article has been to assess how well we can rely on the statutory earnings to reflect the company's potential, but there is plenty more to consider. Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, Maxim Global Berhad has 4 warning signs (and 2 which are a bit concerning) we think you should know about. This note has only looked at a single factor that sheds light on the nature of Maxim Global Berhad's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. 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
02-05-2025
- Business
- Yahoo
Maxim Global Berhad's (KLSE:MAXIM) Promising Earnings May Rest On Soft Foundations
Despite posting some strong earnings, the market for Maxim Global Berhad's (KLSE:MAXIM) stock hasn't moved much. Our analysis suggests that shareholders have noticed something concerning in the numbers. 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. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. This ratio tells us how much of a company's profit is not backed by free cashflow. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. To quote a 2014 paper by Lewellen and Resutek, "firms with higher accruals tend to be less profitable in the future". Over the twelve months to December 2024, Maxim Global Berhad recorded an accrual ratio of 0.54. Statistically speaking, that's a real negative for future earnings. And indeed, during the period the company didn't produce any free cash flow whatsoever. In the last twelve months it actually had negative free cash flow, with an outflow of RM293m despite its profit of RM26.9m, mentioned above. We also note that Maxim Global Berhad's free cash flow was actually negative last year as well, so we could understand if shareholders were bothered by its outflow of RM293m. Note: we always recommend investors check balance sheet strength. Click here to be taken to our balance sheet analysis of Maxim Global Berhad. As we have made quite clear, we're a bit worried that Maxim Global Berhad didn't back up the last year's profit with free cashflow. For this reason, we think that Maxim Global Berhad's statutory profits may be a bad guide to its underlying earnings power, and might give investors an overly positive impression of the company. But the happy news is that, while acknowledging we have to look beyond the statutory numbers, those numbers are still improving, with EPS growing at a very high rate over the last year. 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. With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For instance, we've identified 4 warning signs for Maxim Global Berhad (1 is potentially serious) you should be familiar with. This note has only looked at a single factor that sheds light on the nature of Maxim Global Berhad's profit. But there is always more to discover if you are capable of focussing your mind on minutiae. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. 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
27-02-2025
- Business
- Yahoo
Maxim Global Berhad Full Year 2024 Earnings: EPS: RM0.037 (vs RM0.008 in FY 2023)
Revenue: RM329.9m (up 182% from FY 2023). Net income: RM26.9m (up 406% from FY 2023). Profit margin: 8.2% (up from 4.6% in FY 2023). The increase in margin was driven by higher revenue. EPS: RM0.037 (up from RM0.008 in FY 2023). All figures shown in the chart above are for the trailing 12 month (TTM) period Maxim Global Berhad shares are down 1.8% from a week ago. What about risks? Every company has them, and we've spotted 4 warning signs for Maxim Global Berhad (of which 1 is a bit unpleasant!) you should know about. 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
27-02-2025
- Business
- Yahoo
Maxim Global Berhad Full Year 2024 Earnings: EPS: RM0.037 (vs RM0.008 in FY 2023)
Revenue: RM329.9m (up 182% from FY 2023). Net income: RM26.9m (up 406% from FY 2023). Profit margin: 8.2% (up from 4.6% in FY 2023). The increase in margin was driven by higher revenue. EPS: RM0.037 (up from RM0.008 in FY 2023). All figures shown in the chart above are for the trailing 12 month (TTM) period Maxim Global Berhad shares are down 1.8% from a week ago. What about risks? Every company has them, and we've spotted 4 warning signs for Maxim Global Berhad (of which 1 is a bit unpleasant!) you should know about. 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.
