It's shaping up to be a tough period for Guangzhou Sie Consulting Co., Ltd. (SZSE:300687), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Unfortunately, Guangzhou Sie Consulting delivered a serious earnings miss. Revenues of CN¥540m were 16% below expectations, and statutory earnings per share of CN¥0.049 missed estimates by 53%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Guangzhou Sie Consulting's nine analysts is for revenues of CN¥2.63b in 2024. This would reflect a meaningful 16% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 8.6% to CN¥0.78. Before this earnings report, the analysts had been forecasting revenues of CN¥3.12b and earnings per share (EPS) of CN¥0.88 in 2024. Indeed, we can see that the analysts are a lot more bearish about Guangzhou Sie Consulting's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Despite the cuts to forecast earnings, there was no real change to the CN¥28.59 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Guangzhou Sie Consulting, with the most bullish analyst valuing it at CN¥36.11 and the most bearish at CN¥19.76 per share. 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 Guangzhou Sie Consulting shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Guangzhou Sie Consulting'shistorical trends, as the 21% annualised revenue growth to the end of 2024 is roughly in line with the 19% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 22% per year. It's clear that while Guangzhou Sie Consulting's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Guangzhou Sie Consulting. 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. 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Guangzhou Sie Consulting going out to 2026, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Guangzhou Sie Consulting that you should be aware of.
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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.