As you might know, Zhejiang Meida Industrial Co., Ltd. (SZSE:002677) last week released its latest first-quarter, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥273m) coming in 24% below what they had expected. Statutory earnings per share of CN¥0.12 fell 29% short. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, Zhejiang Meida Industrial's six analysts currently expect revenues in 2024 to be CN¥1.67b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 8.1% to CN¥0.78. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.98b and earnings per share (EPS) of CN¥0.87 in 2024. Indeed, we can see that the analysts are a lot more bearish about Zhejiang Meida Industrial's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 8.0% to CN¥10.72, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Zhejiang Meida Industrial analyst has a price target of CN¥13.00 per share, while the most pessimistic values it at CN¥7.20. 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.
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 revenue is expected to reverse, with a forecast 0.5% annualised decline to the end of 2024. That is a notable change from historical growth of 6.0% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 9.8% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Zhejiang Meida Industrial is expected to lag 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 Zhejiang Meida Industrial. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Zhejiang Meida Industrial going out to 2026, and you can see them free on our platform here..
You still need to take note of risks, for example - Zhejiang Meida Industrial 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.