Last week, you might have seen that Shenzhen KSTAR Science and Technology Co., Ltd. (SZSE:002518) released its yearly result to the market. The early response was not positive, with shares down 2.4% to CN¥22.14 in the past week. Revenues of CN¥5.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥1.45, missing estimates by 4.6%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the most recent consensus for Shenzhen KSTAR Science and Technology from six analysts is for revenues of CN¥6.70b in 2024. If met, it would imply a major 23% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 21% to CN¥1.74. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.93b and earnings per share (EPS) of CN¥1.71 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was reduced 10% to CN¥26.30, with the lower revenue forecasts indicating negative sentiment towards Shenzhen KSTAR Science and Technology, even though earnings forecasts were unchanged. 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. Currently, the most bullish analyst values Shenzhen KSTAR Science and Technology at CN¥29.98 per share, while the most bearish prices it at CN¥22.00. 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. The analysts are definitely expecting Shenzhen KSTAR Science and Technology's growth to accelerate, with the forecast 23% annualised growth to the end of 2024 ranking favourably alongside historical growth of 19% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shenzhen KSTAR Science and Technology to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded Shenzhen KSTAR Science and Technology's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Yet - earnings are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Shenzhen KSTAR Science and Technology's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Shenzhen KSTAR Science and Technology going out to 2026, and you can see them free on our platform here..

You still need to take note of risks, for example - Shenzhen KSTAR Science and Technology has 1 warning sign we think 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.