The analysts might have been a bit too bullish on Hithink RoyalFlush Information Network Co., Ltd. (SZSE:300033), given that the company fell short of expectations when it released its annual results last week. Hithink RoyalFlush Information Network missed earnings this time around, with CN¥3.6b revenue coming in 6.3% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥2.61 also fell short of expectations by 15%. 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, the consensus forecast from Hithink RoyalFlush Information Network's 14 analysts is for revenues of CN¥4.08b in 2024. This reflects a notable 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 35% to CN¥3.52. Before this earnings report, the analysts had been forecasting revenues of CN¥4.63b and earnings per share (EPS) of CN¥3.87 in 2024. Indeed, we can see that sentiment has declined measurably after results came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

The consensus price target fell 6.6% to CN¥165, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Hithink RoyalFlush Information Network, with the most bullish analyst valuing it at CN¥220 and the most bearish at CN¥83.30 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hithink RoyalFlush Information Network's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Hithink RoyalFlush Information Network's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it's pretty clear that, while Hithink RoyalFlush Information Network's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hithink RoyalFlush Information Network. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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. At Simply Wall St, we have a full range of analyst estimates for Hithink RoyalFlush Information Network going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Hithink RoyalFlush Information Network .

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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.