A week ago, Joyoung Co.,Ltd (SZSE:002242) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. JoyoungLtd delivered a significant beat to revenue and earnings per share (EPS) expectations, hitting CN¥2.1b-12% above indicated-andCN¥0.17-45% above forecasts- respectively Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on JoyoungLtd after the latest results.
Following the latest results, JoyoungLtd's 16 analysts are now forecasting revenues of CN¥10.2b in 2024. This would be a modest 3.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 25% to CN¥0.65. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥10.2b and earnings per share (EPS) of CN¥0.62 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
The consensus price target was unchanged at CN¥12.23, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 JoyoungLtd, with the most bullish analyst valuing it at CN¥17.00 and the most bearish at CN¥9.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the JoyoungLtd's past performance and to peers in the same industry. The analysts are definitely expecting JoyoungLtd's growth to accelerate, with the forecast 5.1% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.8% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 9.8% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, JoyoungLtd is expected to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards JoyoungLtd following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥12.23, 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 JoyoungLtd going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - JoyoungLtd 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.