It's been a good week for Xtep International Holdings Limited (HKG:1368) shareholders, because the company has just released its latest full-year results, and the shares gained 8.9% to HK$5.04. Results were roughly in line with estimates, with revenues of CN¥14b and statutory earnings per share of CN¥0.40. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the current consensus from Xtep International Holdings' 27 analysts is for revenues of CN¥15.9b in 2024. This would reflect a notable 11% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 11% to CN¥0.45. Before this earnings report, the analysts had been forecasting revenues of CN¥16.3b and earnings per share (EPS) of CN¥0.47 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.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.3% to HK$5.88. 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. Currently, the most bullish analyst values Xtep International Holdings at HK$7.69 per share, while the most bearish prices it at HK$4.09. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Xtep International Holdings' revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. Compare this to the 115 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 9.8% per year. Factoring in the forecast slowdown in growth, it looks like Xtep International Holdings is forecast to grow at about the same rate as 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 Xtep International Holdings. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Xtep International Holdings' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Xtep International Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Xtep International Holdings going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Xtep International Holdings has 1 warning sign we think you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.