Shareholders of Kinatico Ltd (ASX:KYP) will be pleased this week, given that the stock price is up 12% to AU$0.16 following its latest full-year results. Kinatico reported AU$36m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of AU$0.0047 beat expectations, being 4.4% higher than what the analysts expected. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Following the latest results, Kinatico's four analysts are now forecasting revenues of AU$40.8m in 2027. This would be a decent 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 91% to AU$0.0089. Before this earnings report, the analysts had been forecasting revenues of AU$40.9m and earnings per share (EPS) of AU$0.01 in 2027. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a substantial drop in EPS estimates.
Check out our latest analysis for Kinatico
It might be a surprise to learn that the consensus price target was broadly unchanged at AU$0.39, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Kinatico at AU$0.50 per share, while the most bearish prices it at AU$0.32. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Kinatico's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2027 noticeably faster than its historical growth of 9.6% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 25% per year. So it's clear that despite the acceleration in growth, Kinatico is expected to grow meaningfully slower than the industry average.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kinatico. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Kinatico's revenue is expected to perform worse than the wider industry. 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.
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 Kinatico going out to 2029, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Kinatico you should know about.
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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.