Shenzhen Goodix Technology Co., Ltd. (SHSE:603160) last week reported its latest quarterly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues missed the mark, coming in 18% below forecasts, at CN¥1.0b. Statutory profits were a real bright spot in contrast, with per-share profits of CN¥0.34 being a notable 55% above what the analysts were modelling. 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, Shenzhen Goodix Technology's four analysts currently expect revenues in 2024 to be CN¥4.73b, approximately in line with the last 12 months. Statutory earnings per share are predicted to accumulate 4.7% to CN¥1.42. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.93b and earnings per share (EPS) of CN¥1.14 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the massive increase in to the earnings per share numbers.

The average price target increased 23% to CN¥67.64, with the analysts signalling that the improved earnings outlook is more important to the company's valuation than its revenue. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Shenzhen Goodix Technology, with the most bullish analyst valuing it at CN¥75.00 and the most bearish at CN¥61.20 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Shenzhen Goodix Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 3.8% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 11% a year 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 22% per year. So although Shenzhen Goodix Technology's revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Shenzhen Goodix Technology's earnings potential next year. 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. With that said, earnings are more important to the long-term 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Shenzhen Goodix Technology going out to 2026, and you can see them free on our platform here..

We also provide an overview of the Shenzhen Goodix Technology Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.