It's been a mediocre week for Powerlong Commercial Management Holdings Limited (HKG:9909) shareholders, with the stock dropping 19% to HK$6.02 in the week since its latest yearly results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥2.5b, statutory earnings were in line with expectations, at CN¥0.69 per share. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Powerlong Commercial Management Holdings

Taking into account the latest results, the consensus forecast from Powerlong Commercial Management Holdings' ten analysts is for revenues of CN¥3.07b in 2022, which would reflect a major 25% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 31% to CN¥0.90. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.11b and earnings per share (EPS) of CN¥0.90 in 2022. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The consensus price target fell 11% to HK$14.34, suggesting that the analysts might have been a bit enthusiastic in their previous valuation - or they were expecting the company to provide stronger guidance in the annual results. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Powerlong Commercial Management Holdings, with the most bullish analyst valuing it at HK$30.89 and the most bearish at HK$5.94 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Powerlong Commercial Management Holdings'historical trends, as the 25% annualised revenue growth to the end of 2022 is roughly in line with the 21% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So it's pretty clear that Powerlong Commercial Management Holdings is forecast to grow substantially faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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. We have estimates - from multiple Powerlong Commercial Management Holdings analysts - going out to 2024, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Powerlong Commercial Management Holdings , and understanding these should be part of your investment process.

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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.