Last week saw the newest second-quarter earnings release from Yealink Network Technology Co., Ltd. (SZSE:300628), an important milestone in the company's journey to build a stronger business. It was a workmanlike result, with revenues of CN¥1.5b coming in 3.5% ahead of expectations, and statutory earnings per share of CN¥1.60, in line with analyst appraisals. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Following the latest results, Yealink Network Technology's ten analysts are now forecasting revenues of CN¥5.45b in 2024. This would be a reasonable 4.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 2.6% to CN¥2.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.46b and earnings per share (EPS) of CN¥2.00 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CN¥45.05. 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. The most optimistic Yealink Network Technology analyst has a price target of CN¥50.00 per share, while the most pessimistic values it at CN¥39.00. This is a very narrow spread of estimates, implying either that Yealink Network Technology is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Yealink Network Technology's past performance and to peers in the same industry. We would highlight that Yealink Network Technology's revenue growth is expected to slow, with the forecast 8.3% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 21% annually. Factoring in the forecast slowdown in growth, it seems obvious that Yealink Network Technology is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥45.05, 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 Yealink Network Technology. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Yealink Network Technology analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Yealink Network Technology has 1 warning sign we think you should be aware of.

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