The analysts might have been a bit too bullish on Luxshare Precision Industry Co., Ltd. (SZSE:002475), given that the company fell short of expectations when it released its first-quarter results last week. Luxshare Precision Industry missed analyst forecasts, with revenues of CN¥52b and statutory earnings per share (EPS) of CN¥0.34, falling short by 2.6% and 5.5% respectively. 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 28 analysts covering Luxshare Precision Industry are now predicting revenues of CN¥259.9b in 2024. If met, this would reflect a decent 12% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 29% to CN¥1.96. Before this earnings report, the analysts had been forecasting revenues of CN¥276.4b and earnings per share (EPS) of CN¥1.99 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The consensus has reconfirmed its price target of CN¥43.40, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Luxshare Precision Industry's market value. 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 Luxshare Precision Industry analyst has a price target of CN¥63.00 per share, while the most pessimistic values it at CN¥34.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Luxshare Precision Industry's revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2024 being well below the historical 35% p.a. growth over the last five years. Compare this to the 393 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 17% per year. So it's pretty clear that, while Luxshare Precision Industry's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. 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. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CN¥43.40, 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 Luxshare Precision Industry. Long-term earnings power is much more important than next year's profits. We have forecasts for Luxshare Precision Industry going out to 2026, and you can see them free on our platform here.
You can also see whether Luxshare Precision Industry is carrying too much debt, and whether its balance sheet is healthy, for free 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.