Zhongji Innolight Co., Ltd. (SZSE:300308) just released its latest first-quarter results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at CN¥4.8b, while EPS were CN¥1.28 beating analyst models by 29%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the 22 analysts covering Zhongji Innolight are now predicting revenues of CN¥25.0b in 2024. If met, this would reflect a huge 82% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 65% to CN¥6.15. In the lead-up to this report, the analysts had been modelling revenues of CN¥24.7b and earnings per share (EPS) of CN¥5.87 in 2024. So the consensus seems to have become somewhat more optimistic on Zhongji Innolight's earnings potential following these results.
There's been no major changes to the consensus price target of CN¥184, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Zhongji Innolight, with the most bullish analyst valuing it at CN¥235 and the most bearish at CN¥125 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhongji Innolight's past performance and to peers in the same industry. It's clear from the latest estimates that Zhongji Innolight's rate of growth is expected to accelerate meaningfully, with the forecast 123% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 19% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhongji Innolight is expected to grow much faster than its 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 Zhongji Innolight following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Zhongji Innolight. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zhongji Innolight analysts - going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Zhongji Innolight , and understanding it should be part of your investment process.
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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.