Crystal Clear Electronic Material Co., Ltd. (SZSE:300655) just released its latest second-quarter report and things are not looking great. Unfortunately, Crystal Clear Electronic Material delivered a serious earnings miss. Revenues of CN¥492m were 20% below expectations, and statutory earnings per share of CN¥0.05 missed estimates by 78%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Crystal Clear Electronic Material

After the latest results, the three analysts covering Crystal Clear Electronic Material are now predicting revenues of CN¥2.32b in 2022. If met, this would reflect a huge 22% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 39% to CN¥0.40. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.69b and earnings per share (EPS) of CN¥0.46 in 2022. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

What's most unexpected is that the consensus price target rose 21% to CN¥27.25, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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 Crystal Clear Electronic Material at CN¥30.00 per share, while the most bearish prices it at CN¥24.50. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Crystal Clear Electronic Material is an easy business to forecast or the the analysts are all using similar assumptions.

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. It's clear from the latest estimates that Crystal Clear Electronic Material's rate of growth is expected to accelerate meaningfully, with the forecast 48% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 27% 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 19% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Crystal Clear Electronic Material is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Crystal Clear Electronic Material. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Crystal Clear Electronic Material going out to 2024, and you can see them free on our platform here..

Even so, be aware that Crystal Clear Electronic Material is showing 1 warning sign in our investment analysis , 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.