It's been a good week for Canmax Technologies Co., Ltd. (SZSE:300390) shareholders, because the company has just released its latest full-year results, and the shares gained 4.6% to CN¥19.99. Canmax Technologies reported a serious miss, with revenue of CN¥10b falling a huge 39% short of analyst estimates. The bright side is that statutory earnings per share of CN¥1.99 were in line with forecasts. The analyst typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.
Taking into account the latest results, the solitary analyst covering Canmax Technologies provided consensus estimates of CN¥7.92b revenue in 2024, which would reflect a substantial 24% decline over the past 12 months. Statutory earnings per share are forecast to tumble 22% to CN¥1.56 in the same period. Before this earnings report, the analyst had been forecasting revenues of CN¥9.60b and earnings per share (EPS) of CN¥1.16 in 2024. So there's been quite a change-up of views after the latest results, with the analyst making a serious cut to their revenue forecasts while also granting a considerable lift to to the earnings per share numbers.
The analyst has cut their price target 6.1% to CN¥21.40per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 24% by the end of 2024. This indicates a significant reduction from annual growth of 59% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Canmax Technologies is expected to lag 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 Canmax Technologies' earnings potential next year. 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. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analyst 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 Canmax Technologies. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
It is also worth noting that we have found 2 warning signs for Canmax Technologies that you need to take into consideration.
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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.