Last week saw the newest annual earnings release from Wuxi DK Electronic Materials Co.,Ltd. (SZSE:300842), an important milestone in the company's journey to build a stronger business. It was a pretty mixed result, with revenues beating expectations to hit CN¥9.6b. Statutory earnings fell 3.0% short of analyst forecasts, reaching CN¥3.84 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Wuxi DK Electronic MaterialsLtd's three analysts is for revenues of CN¥15.4b in 2024. This would reflect a huge 61% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 69% to CN¥6.49. Before this earnings report, the analysts had been forecasting revenues of CN¥13.3b and earnings per share (EPS) of CN¥6.26 in 2024. The analysts seem more optimistic after the latest results, with a nice gain to revenue and a small increase to earnings per share estimates.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥95.74, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Wuxi DK Electronic MaterialsLtd analyst has a price target of CN¥100 per share, while the most pessimistic values it at CN¥91.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. It's clear from the latest estimates that Wuxi DK Electronic MaterialsLtd's rate of growth is expected to accelerate meaningfully, with the forecast 61% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 44% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 24% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wuxi DK Electronic MaterialsLtd to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Wuxi DK Electronic MaterialsLtd's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at CN¥95.74, with the latest estimates not enough to have an impact on their price targets.
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 estimates - from multiple Wuxi DK Electronic MaterialsLtd analysts - going out to 2025, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Wuxi DK Electronic MaterialsLtd , and understanding these should be part of your investment process.
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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.