It's shaping up to be a tough period for Guizhou Space Appliance Co., LTD (SZSE:002025), which a week ago released some disappointing yearly results that could have a notable impact on how the market views the stock. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥6.2b missed by 16%, and statutory earnings per share of CN¥1.65 fell short of forecasts by 4.5%. 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 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 Guizhou Space Appliance's five analysts is for revenues of CN¥7.77b in 2024. This would reflect a substantial 25% increase on its revenue over the past 12 months. Per-share earnings are expected to soar 32% to CN¥2.17. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥9.52b and earnings per share (EPS) of CN¥2.33 in 2024. Indeed, we can see that sentiment has declined measurably after results came out, with a real cut to revenue estimates and a small dip in EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.9% to CN¥60.84. 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. There are some variant perceptions on Guizhou Space Appliance, with the most bullish analyst valuing it at CN¥78.00 and the most bearish at CN¥47.74 per share. 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.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Guizhou Space Appliance's growth to accelerate, with the forecast 25% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Guizhou Space Appliance is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Guizhou Space Appliance. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Guizhou Space Appliance going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for Guizhou Space Appliance you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.