Investors in Guangdong Great River Smarter Logistics Co., Ltd. (SZSE:002930) had a good week, as its shares rose 3.9% to close at CN¥22.01 following the release of its first-quarter results. Guangdong Great River Smarter Logistics beat revenue forecasts by a solid 14% to hit CN¥376m. Statutory earnings per share came in at CN¥0.50, in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Guangdong Great River Smarter Logistics
Taking into account the latest results, the most recent consensus for Guangdong Great River Smarter Logistics from three analysts is for revenues of CN¥1.60b in 2023. If met, it would imply an okay 7.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 18% to CN¥0.73. Before this earnings report, the analysts had been forecasting revenues of CN¥1.61b and earnings per share (EPS) of CN¥0.76 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target fell 5.7% to CN¥23.24, with the analysts clearly linking lower forecast earnings to the performance of the stock price. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Guangdong Great River Smarter Logistics, with the most bullish analyst valuing it at CN¥23.30 and the most bearish at CN¥23.17 per share. This is a very narrow spread of estimates, implying either that Guangdong Great River Smarter Logistics is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
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. We would highlight that Guangdong Great River Smarter Logistics' revenue growth is expected to slow, with the forecast 10.0% annualised growth rate until the end of 2023 being well below the historical 27% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 13% per year. Factoring in the forecast slowdown in growth, it seems obvious that Guangdong Great River Smarter Logistics is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Guangdong Great River Smarter Logistics. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Guangdong Great River Smarter Logistics' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Guangdong Great River Smarter Logistics' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Guangdong Great River Smarter Logistics. Long-term earnings power is much more important than next year's profits. We have forecasts for Guangdong Great River Smarter Logistics going out to 2025, and you can see them free on our platform here.
You still need to take note of risks, for example - Guangdong Great River Smarter Logistics has 2 warning signs (and 1 which is potentially serious) we think 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.