The half-yearly results for Wanda Film Holding Co., Ltd. (SZSE:002739) were released last week, making it a good time to revisit its performance. It was a workmanlike result, with revenues of CN¥4.9b coming in 9.5% ahead of expectations, and statutory earnings per share of CN¥0.048, in line with analyst appraisals. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Wanda Film Holding

Taking into account the latest results, the current consensus from Wanda Film Holding's six analysts is for revenues of CN¥12.2b in 2022, which would reflect a decent 18% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 90% to CN¥0.05 per share. Before this earnings report, the analysts had been forecasting revenues of CN¥12.2b and earnings per share (EPS) of CN¥0.25 in 2022. While the analysts have made no real change to their revenue estimates, we can see that the consensus is now modelling a loss next year - a clear dip in sentiment compared to the previous outlook of a profit.

The consensus price target fell 6.5% to CN¥13.86per share, with the analysts clearly concerned by ballooning losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Wanda Film Holding at CN¥15.40 per share, while the most bearish prices it at CN¥12.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Wanda Film Holding is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Wanda Film Holding's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 38% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 7.5% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 16% annually. So it looks like Wanda Film Holding is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest low-light for us was that the forecasts for Wanda Film Holding dropped from profits to a loss next year. Happily, there were no major changes to revenue forecasts, with the business still 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Wanda Film Holding going out to 2024, and you can see them free on our platform here.

It might also be worth considering whether Wanda Film Holding's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.