It's been a good week for Empyrean Technology Co., Ltd. (SZSE:301269) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.3% to CN¥78.20. Results overall were not great, with earnings of CN¥0.014 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥213m and were slightly better than forecasts. 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 Empyrean Technology's ten analysts is for revenues of CN¥1.33b in 2024. This would reflect a major 25% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 66% to CN¥0.57. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.44b and earnings per share (EPS) of CN¥0.61 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.2% to CN¥121. 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. Currently, the most bullish analyst values Empyrean Technology at CN¥140 per share, while the most bearish prices it at CN¥100.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. It's clear from the latest estimates that Empyrean Technology's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 24% over the past year. 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. Factoring in the forecast acceleration in revenue, it's pretty clear that Empyrean Technology is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Empyrean Technology. They also downgraded Empyrean Technology's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts 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 Empyrean Technology. 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 Empyrean Technology 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 Empyrean Technology 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.