Wangsu Science & Technology Co.,Ltd. (SZSE:300017) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Statutory revenue and earnings both blasted past expectations, with revenue of CN¥1.3b beating expectations by 21% and earnings per share (EPS) reaching CN¥0.02, some 32% ahead of expectations. 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 Wangsu Science & TechnologyLtd

Taking into account the latest results, Wangsu Science & TechnologyLtd's six analysts currently expect revenues in 2022 to be CN¥5.00b, approximately in line with the last 12 months. Statutory earnings per share are predicted to shoot up 20% to CN¥0.08. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.03b and earnings per share (EPS) of CN¥0.088 in 2022. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The consensus price target held steady at CN¥4.50, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Wangsu Science & TechnologyLtd at CN¥5.60 per share, while the most bearish prices it at CN¥2.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2022 compared to the historical decline of 3.2% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 20% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Wangsu Science & TechnologyLtd to suffer worse 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 Wangsu Science & TechnologyLtd. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Wangsu Science & TechnologyLtd's revenues are expected to perform worse than the wider industry. The consensus price target held steady at CN¥4.50, with the latest estimates not enough to have an impact on their price targets.

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 Wangsu Science & TechnologyLtd analysts - going out to 2024, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Wangsu Science & TechnologyLtd you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.