Investors in BBMG Corporation (HKG:2009) had a good week, as its shares rose 3.2% to close at HK$0.64 following the release of its yearly results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 4.5%to hit CN¥108b. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the current consensus, from the three analysts covering BBMG, is for revenues of CN¥103.1b in 2024. This implies a discernible 4.5% reduction in BBMG's revenue over the past 12 months. Before this earnings report, the analysts had been forecasting revenues of CN¥109.2b and earnings per share (EPS) of CN¥0.10 in 2024. So we can see that while the consensus made a minor downgrade to revenue estimates, it no longer provides an earnings per share estimate. This suggests that the market is now more focused on revenue after the latest result.

Intriguingly,the analysts have cut their price target 8.6% to HK$1.30 showing a clear decline in sentiment around BBMG's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on BBMG, with the most bullish analyst valuing it at HK$1.99 and the most bearish at HK$0.59 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the BBMG's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 4.5% by the end of 2024. This indicates a significant reduction from annual growth of 4.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.4% annually for the foreseeable future. It's pretty clear that BBMG's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates it is expected to perform worse than 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.

At least one of BBMG's three analysts has provided estimates out to 2026, which can be seen for free on our platform here.

It is also worth noting that we have found 4 warning signs for BBMG (1 can't be ignored!) 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.