It's been a pretty great week for Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) shareholders, with its shares surging 13% to CN¥114 in the week since its latest second-quarter results. Revenues were CN¥217m, 21% shy of what the analysts were expecting, although statutory earnings of CN¥1.25 per share were roughly in line with what was forecast. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Kunshan Dongwei TechnologyLtd

Taking into account the latest results, the current consensus from Kunshan Dongwei TechnologyLtd's two analysts is for revenues of CN¥1.10b in 2022, which would reflect a major 27% increase on its sales over the past 12 months. Per-share earnings are expected to surge 37% to CN¥1.72. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.21b and earnings per share (EPS) of CN¥1.88 in 2022. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

What's most unexpected is that the consensus price target rose 22% to CN¥125, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

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. The analysts are definitely expecting Kunshan Dongwei TechnologyLtd's growth to accelerate, with the forecast 60% annualised growth to the end of 2022 ranking favourably alongside historical growth of 19% per annum over the past year. 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. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kunshan Dongwei TechnologyLtd to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kunshan Dongwei TechnologyLtd. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Kunshan Dongwei TechnologyLtd. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2024, which can be seen for free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Kunshan Dongwei TechnologyLtd .

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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.