Shareholders might have noticed that Zhuhai CosMX Battery Co., Ltd. (SHSE:688772) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.6% to CN¥11.92 in the past week. Results overall were not great, with earnings of CN¥0.01 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥2.5b and were slightly better than forecasts. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the seven analysts covering Zhuhai CosMX Battery are now predicting revenues of CN¥12.9b in 2024. If met, this would reflect a meaningful 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 66% to CN¥0.73. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥13.6b and earnings per share (EPS) of CN¥0.80 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.
The consensus price target fell 7.1% to CN¥19.50, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Zhuhai CosMX Battery analyst has a price target of CN¥22.00 per share, while the most pessimistic values it at CN¥15.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Zhuhai CosMX Battery shareholders.
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. It's clear from the latest estimates that Zhuhai CosMX Battery's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 7.8% p.a. over the past three years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhuhai CosMX Battery is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zhuhai CosMX Battery. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Zhuhai CosMX Battery's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Zhuhai CosMX Battery. 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 Zhuhai CosMX Battery going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Zhuhai CosMX Battery that we have uncovered.
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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.