SICC Co., Ltd. (SHSE:688234) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to CN¥47.25 in the week after its latest second-quarter results. It looks like a credible result overall - although revenues of CN¥486m were what the analysts expected, SICC surprised by delivering a (statutory) profit of CN¥0.13 per share, an impressive 66% above what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following the latest results, SICC's ten analysts are now forecasting revenues of CN¥2.26b in 2024. This would be a substantial 31% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 41% to CN¥0.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.14b and earnings per share (EPS) of CN¥0.41 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥65.00, suggesting that the forecast performance does not have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on SICC, with the most bullish analyst valuing it at CN¥95.00 and the most bearish at CN¥39.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that SICC's revenue growth is expected to slow, with the forecast 72% annualised growth rate until the end of 2024 being well below the historical 148% growth over the last year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 22% per year. Even after the forecast slowdown in growth, it seems obvious that SICC is also expected to grow faster than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SICC's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple SICC analysts - going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for SICC that you need to take into consideration.
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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.
