The annual results for Sangfor Technologies Inc. (SZSE:300454) were released last week, making it a good time to revisit its performance. Revenues were in line with forecasts, at CN¥7.7b, although statutory earnings per share came in 16% below what the analysts expected, at CN¥0.47 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sangfor Technologies after the latest results.

After the latest results, the 19 analysts covering Sangfor Technologies are now predicting revenues of CN¥8.54b in 2024. If met, this would reflect a notable 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 65% to CN¥0.78. Before this earnings report, the analysts had been forecasting revenues of CN¥9.05b and earnings per share (EPS) of CN¥1.13 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.6% to CN¥72.87. 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. The most optimistic Sangfor Technologies analyst has a price target of CN¥114 per share, while the most pessimistic values it at CN¥45.40. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sangfor Technologies' past performance and to peers in the same industry. We would highlight that Sangfor Technologies' revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 21% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sangfor Technologies is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sangfor Technologies. 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. 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.

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 estimates - from multiple Sangfor Technologies analysts - 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 Sangfor Technologies 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.