Neway CNC Equipment (Suzhou) Co., Ltd. (SHSE:688697) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. Neway CNC Equipment (Suzhou) missed analyst forecasts, with revenues of CN¥2.3b and statutory earnings per share (EPS) of CN¥0.97, falling short by 2.1% and 3.0% respectively. 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.
Taking into account the latest results, the most recent consensus for Neway CNC Equipment (Suzhou) from three analysts is for revenues of CN¥2.73b in 2024. If met, it would imply a meaningful 17% increase on its revenue over the past 12 months. Per-share earnings are expected to grow 19% to CN¥1.16. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.90b and earnings per share (EPS) of CN¥1.25 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
It'll come as no surprise then, to learn that the analysts have cut their price target 11% to CN¥25.72. 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. There are some variant perceptions on Neway CNC Equipment (Suzhou), with the most bullish analyst valuing it at CN¥27.00 and the most bearish at CN¥24.43 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Neway CNC Equipment (Suzhou) is an easy business to forecast or the the analysts are all using similar assumptions.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Neway CNC Equipment (Suzhou)'s past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 19% per year. So although Neway CNC Equipment (Suzhou) is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Neway CNC Equipment (Suzhou)'s future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Neway CNC Equipment (Suzhou) going out to 2026, and you can see them free on our platform here..
Even so, be aware that Neway CNC Equipment (Suzhou) is showing 2 warning signs in our investment analysis , 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.