It's been a sad week for Pony Testing Co., Ltd. (SZSE:300887), who've watched their investment drop 14% to CN¥56.81 in the week since the company reported its first-quarter result. Results were roughly in line with estimates, with revenues of CN¥534m and statutory earnings per share of CN¥1.60. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Pony Testing

Taking into account the latest results, the consensus forecast from Pony Testing's four analysts is for revenues of CN¥2.57b in 2022, which would reflect a meaningful 15% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to reduce 9.4% to CN¥1.78 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥2.50b and earnings per share (EPS) of CN¥2.10 in 2022. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The analysts also cut Pony Testing's price target 7.4% to CN¥89.47, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in sales. 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 Pony Testing at CN¥122 per share, while the most bearish prices it at CN¥71.19. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Pony Testing's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 21% growth on an annualised basis. This is compared to a historical growth rate of 42% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 21% annually. Factoring in the forecast slowdown in growth, it looks like Pony Testing is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Pony Testing going out to 2024, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Pony Testing (1 makes us a bit uncomfortable!) that you need to take into consideration.

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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.