As you might know, Universal Scientific Industrial (Shanghai) Co., Ltd. (SHSE:601231) recently reported its yearly numbers. It looks like the results were a bit of a negative overall. While revenues of CN¥61b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.3% to hit CN¥0.87 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Universal Scientific Industrial (Shanghai) after the latest results.
Taking into account the latest results, the most recent consensus for Universal Scientific Industrial (Shanghai) from six analysts is for revenues of CN¥66.9b in 2024. If met, it would imply a meaningful 10% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 23% to CN¥1.10. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥67.6b and earnings per share (EPS) of CN¥1.14 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥17.25, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Universal Scientific Industrial (Shanghai), with the most bullish analyst valuing it at CN¥20.00 and the most bearish at CN¥11.50 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
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. We would highlight that Universal Scientific Industrial (Shanghai)'s revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Universal Scientific Industrial (Shanghai).
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Universal Scientific Industrial (Shanghai). Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Universal Scientific Industrial (Shanghai)'s revenue is expected to perform worse than the wider industry. The consensus price target held steady at CN¥17.25, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Universal Scientific Industrial (Shanghai) going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Universal Scientific Industrial (Shanghai) that you should be aware of.
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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.