New DaZheng Property Group Co., LTD (SZSE:002968) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to CN¥9.55 in the week after its latest yearly results. Revenues of CN¥3.1b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥0.71, missing estimates by 8.6%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the four analysts covering New DaZheng Property Group are now predicting revenues of CN¥3.55b in 2024. If met, this would reflect a notable 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 14% to CN¥0.80. Before this earnings report, the analysts had been forecasting revenues of CN¥3.80b and earnings per share (EPS) of CN¥0.97 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.
The consensus price target fell 15% to CN¥10.65, with the weaker earnings outlook clearly leading valuation estimates. 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 New DaZheng Property Group, with the most bullish analyst valuing it at CN¥10.80 and the most bearish at CN¥10.50 per share. 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 New DaZheng Property Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 13% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 5.7% per year. So it's pretty clear that, while New DaZheng Property Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for New DaZheng Property Group. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster 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.
With that in mind, we wouldn't be too quick to come to a conclusion on New DaZheng Property Group. Long-term earnings power is much more important than next year's profits. We have forecasts for New DaZheng Property Group going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with New DaZheng Property Group .
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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.