Investors in Wangsu Science & Technology Co.,Ltd. (SZSE:300017) had a good week, as its shares rose 4.1% to close at CN¥9.65 following the release of its first-quarter results. Wangsu Science & TechnologyLtd's revenues suffered a catastrophic miss, falling 21% short of forecasts, at CN¥1.1b. Statutory earnings per share however performed much better, hitting CN¥0.057, 183% above forecast. 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. 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 most recent consensus for Wangsu Science & TechnologyLtd from six analysts is for revenues of CN¥4.98b in 2024. If met, it would imply an okay 6.9% increase on its revenue over the past 12 months. Statutory earnings per share are expected to descend 17% to CN¥0.22 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.13b and earnings per share (EPS) of CN¥0.22 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 price target rose 5.8% to CN¥8.65, with the analysts apparently satisfied with the business performance despite lower revenue forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Wangsu Science & TechnologyLtd analyst has a price target of CN¥12.08 per share, while the most pessimistic values it at CN¥4.70. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Wangsu Science & TechnologyLtd is forecast to grow faster in the future than it has in the past, with revenues expected to display 9.4% annualised growth until the end of 2024. If achieved, this would be a much better result than the 6.7% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 20% per year. So although Wangsu Science & TechnologyLtd's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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. Still, earnings are more important to the intrinsic value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Wangsu Science & TechnologyLtd. Long-term earnings power is much more important than next year's profits. We have forecasts for Wangsu Science & TechnologyLtd going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Wangsu Science & TechnologyLtd 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.