GD Power Development Co.,Ltd (SHSE:600795) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥181b, statutory earnings missed forecasts by an incredible 22%, coming in at just CN¥0.31 per share. 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.
Following the latest results, GD Power DevelopmentLtd's nine analysts are now forecasting revenues of CN¥192.2b in 2024. This would be a modest 6.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 30% to CN¥0.41. Before this earnings report, the analysts had been forecasting revenues of CN¥198.6b and earnings per share (EPS) of CN¥0.50 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.
What's most unexpected is that the consensus price target rose 8.1% to CN¥5.31, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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. The most optimistic GD Power DevelopmentLtd analyst has a price target of CN¥6.53 per share, while the most pessimistic values it at CN¥4.26. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that GD Power DevelopmentLtd's revenue growth is expected to slow, with the forecast 6.2% annualised growth rate until the end of 2024 being well below the historical 13% p.a. growth over the last five years. Compare this to the 56 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.3% per year. Factoring in the forecast slowdown in growth, it looks like GD Power DevelopmentLtd is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple GD Power DevelopmentLtd analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - GD Power DevelopmentLtd has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
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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.