Investors in Shenzhen Topband Co., Ltd. (SZSE:002139) had a good week, as its shares rose 8.9% to close at CN¥10.08 following the release of its first-quarter results. It was a workmanlike result, with revenues of CN¥2.3b coming in 6.6% ahead of expectations, and statutory earnings per share of CN¥0.41, in line with analyst appraisals. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the eight analysts covering Shenzhen Topband are now predicting revenues of CN¥10.7b in 2024. If met, this would reflect a notable 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to swell 15% to CN¥0.55. Before this earnings report, the analysts had been forecasting revenues of CN¥10.3b and earnings per share (EPS) of CN¥0.53 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
Despite these upgrades,the analysts have not made any major changes to their price target of CN¥13.02, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Shenzhen Topband analyst has a price target of CN¥15.00 per share, while the most pessimistic values it at CN¥11.00. 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 Shenzhen Topband's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Shenzhen Topband'shistorical trends, as the 20% annualised revenue growth to the end of 2024 is roughly in line with the 20% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 17% annually. So although Shenzhen Topband is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shenzhen Topband's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that Shenzhen Topband will grow in line with the overall industry. The consensus price target held steady at CN¥13.02, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Shenzhen Topband. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shenzhen Topband analysts - going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.