Wuxi Best Precision Machinery Co., Ltd. (SZSE:300580) shareholders are probably feeling a little disappointed, since its shares fell 5.1% to CN¥13.72 in the week after its latest second-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥354m, statutory earnings were in line with expectations, at CN¥0.56 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Taking into account the latest results, the most recent consensus for Wuxi Best Precision Machinery from eight analysts is for revenues of CN¥1.62b in 2024. If met, it would imply a notable 15% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 21% to CN¥0.67. Before this earnings report, the analysts had been forecasting revenues of CN¥1.69b and earnings per share (EPS) of CN¥0.70 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The analysts made no major changes to their price target of CN¥21.15, suggesting the downgrades are not expected to have a long-term impact on Wuxi Best Precision Machinery's valuation. 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 Wuxi Best Precision Machinery analyst has a price target of CN¥22.00 per share, while the most pessimistic values it at CN¥20.30. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Wuxi Best Precision Machinery's growth to accelerate, with the forecast 33% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Wuxi Best Precision Machinery is expected to grow much faster than its 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. They also downgraded Wuxi Best Precision Machinery's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at CN¥21.15, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Wuxi Best Precision Machinery analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Wuxi Best Precision Machinery that you need to take into consideration.

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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.