Shareholders might have noticed that Shanghai Pret Composites Co., Ltd. (SZSE:002324) filed its first-quarter result this time last week. The early response was not positive, with shares down 4.7% to CN¥10.19 in the past week. Revenues were CN¥1.9b, 22% shy of what the analysts were expecting, although statutory earnings of CN¥0.45 per share were roughly in line with what was forecast. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the most recent consensus for Shanghai Pret Composites from four analysts is for revenues of CN¥11.0b in 2024. If met, it would imply a huge 26% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 24% to CN¥0.50. In the lead-up to this report, the analysts had been modelling revenues of CN¥14.2b and earnings per share (EPS) of CN¥0.70 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a large cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 24% to CN¥11.80.

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. The analysts are definitely expecting Shanghai Pret Composites' growth to accelerate, with the forecast 36% annualised growth to the end of 2024 ranking favourably alongside historical growth of 21% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shanghai Pret Composites to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shanghai Pret Composites. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. 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.

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 Shanghai Pret Composites going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Shanghai Pret Composites you should know about.

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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.