The analysts might have been a bit too bullish on Nuode New Materials Co.,Ltd. (SHSE:600110), given that the company fell short of expectations when it released its annual results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥4.6b, statutory earnings missed forecasts by an incredible 26%, coming in at just CN¥0.017 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the current consensus from Nuode New MaterialsLtd's dual analysts is for revenues of CN¥6.17b in 2024. This would reflect a major 35% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 51% to CN¥0.024. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.50b and earnings per share (EPS) of CN¥0.025 in 2024. While revenue forecasts have increased substantially, the analysts are a little more pessimistic on earnings, suggesting that the growth does not come without cost.

There's been no major changes to the price target of CN¥4.55, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation.

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 Nuode New MaterialsLtd's rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 21% p.a. 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 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Nuode New MaterialsLtd 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 Nuode New MaterialsLtd. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at CN¥4.55, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Nuode New MaterialsLtd. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Nuode New MaterialsLtd going out as far as 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Nuode New MaterialsLtd (2 are concerning!) 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.