Shareholders might have noticed that Longshine Technology Group Co., Ltd. (SZSE:300682) filed its first-quarter result this time last week. The early response was not positive, with shares down 5.2% to CN¥10.01 in the past week. Revenues missed expectations, with revenue of CN¥668m falling 11% short of forecasts. Earnings correspondingly dipped, with Longshine Technology Group reporting a statutory loss of CN¥0.018 per share, where the analysts were expecting a profit. The analysts 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Longshine Technology Group's 13 analysts are now forecasting revenues of CN¥5.91b in 2024. This would be a huge 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 10% to CN¥0.58. Before this earnings report, the analysts had been forecasting revenues of CN¥5.35b and earnings per share (EPS) of CN¥0.67 in 2024. Although revenue sentiment has improved substantially, the analysts have made a real cut to per-share earnings estimates, suggesting that the growth is not without cost.
The consensus price target was unchanged at CN¥16.41, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 Longshine Technology Group analyst has a price target of CN¥26.70 per share, while the most pessimistic values it at CN¥10.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. The analysts are definitely expecting Longshine Technology Group's growth to accelerate, with the forecast 34% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Longshine Technology Group to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Longshine Technology Group. 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 Longshine Technology Group going out to 2026, and you can see them free on our platform here..
However, before you get too enthused, we've discovered 1 warning sign for Longshine Technology Group 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.