The analysts might have been a bit too bullish on Thunder Software Technology Co.,Ltd. (SZSE:300496), given that the company fell short of expectations when it released its annual results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥5.2b, statutory earnings missed forecasts by an incredible 40%, coming in at just CN¥1.02 per share. 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.
Following the latest results, Thunder Software TechnologyLtd's 20 analysts are now forecasting revenues of CN¥6.29b in 2024. This would be a huge 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 71% to CN¥1.73. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥7.23b and earnings per share (EPS) of CN¥2.17 in 2024. Indeed, we can see that the analysts are a lot more bearish about Thunder Software TechnologyLtd's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 9.9% to CN¥73.37. 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. Currently, the most bullish analyst values Thunder Software TechnologyLtd at CN¥107 per share, while the most bearish prices it at CN¥48.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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 pretty clear that there is an expectation that Thunder Software TechnologyLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 20% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 22% annually. So it's pretty clear that, while Thunder Software TechnologyLtd's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Thunder Software TechnologyLtd. They also downgraded their 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.
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 Thunder Software TechnologyLtd going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Thunder Software TechnologyLtd has 2 warning signs we think you should be aware of.
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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.