Last week, you might have seen that Shenzhen Topband Co., Ltd. (SZSE:002139) released its full-year result to the market. The early response was not positive, with shares down 2.9% to CN¥9.14 in the past week. Revenues were in line with forecasts, at CN¥9.0b, although statutory earnings per share came in 11% below what the analysts expected, at CN¥0.41 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the current consensus from Shenzhen Topband's nine analysts is for revenues of CN¥10.4b in 2024. This would reflect a notable 16% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 23% to CN¥0.52. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥11.2b and earnings per share (EPS) of CN¥0.67 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the CN¥13.01 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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 Shenzhen Topband at CN¥14.48 per share, while the most bearish prices it at CN¥11.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. It's pretty clear that there is an expectation that Shenzhen Topband's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this to the 393 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 18% per year. So it's pretty clear that, while Shenzhen Topband'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 Shenzhen Topband. 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 held steady at CN¥13.01, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Shenzhen Topband. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Shenzhen Topband going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Shenzhen Topband that you need to take into consideration.

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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.