Shareholders might have noticed that Sinoma Science & Technology Co.,Ltd. (SZSE:002080) filed its annual result this time last week. The early response was not positive, with shares down 2.4% to CN¥15.27 in the past week. It was not a great result overall. While revenues of CN¥26b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 15% to hit CN¥1.33 per share. 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.
After the latest results, the eleven analysts covering Sinoma Science & TechnologyLtd are now predicting revenues of CN¥28.8b in 2024. If met, this would reflect a meaningful 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 12% to CN¥1.49. In the lead-up to this report, the analysts had been modelling revenues of CN¥30.1b and earnings per share (EPS) of CN¥2.04 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.
The consensus price target fell 17% to CN¥22.52, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Sinoma Science & TechnologyLtd at CN¥27.89 per share, while the most bearish prices it at CN¥19.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Sinoma Science & TechnologyLtd's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 17% annually. Factoring in the forecast slowdown in growth, it seems obvious that Sinoma Science & TechnologyLtd 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 Sinoma Science & TechnologyLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will 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 Sinoma Science & TechnologyLtd's future valuation.
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. At Simply Wall St, we have a full range of analyst estimates for Sinoma Science & TechnologyLtd going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 4 warning signs we've spotted with Sinoma Science & TechnologyLtd .
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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.