Shares in Isentia Group Ltd (ASX: ISD) nosedived this morning after the company released a trading update as part of its Annual General Meeting presentation.
Management revealed that the first half Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) would be lower than the previous first half. Second half earnings are expected to be stronger, leading to a 'high single digit' EBITDA growth forecast for the year, instead of the double digits that were expected previously.
The update has left its mark on Isentia shares, which are now down some 35% for the year, or nearly 50% from highs of $4.95 that were reached in January. It's just another example, alongside Carsales.Com Ltd (ASX: CAR), Blackmores Limited (ASX: BKL) and CSL Limited (ASX: CSL) of how quickly share prices can turn if companies can't maintain the expected high growth rates.
Right now at $2.60, Isentia is trading at around 21 times last year's profits of $24 million. This is a little above the ASX average, which more accurately prices in the lower growth forecast this morning.
