As you might know, Thunder Software Technology Co.,Ltd. (SZSE:300496) last week released its latest quarterly, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥1.2b, statutory earnings missed forecasts by an incredible 89%, coming in at just CN¥0.029 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Thunder Software TechnologyLtd after the latest results.
After the latest results, the 19 analysts covering Thunder Software TechnologyLtd are now predicting revenues of CN¥5.42b in 2024. If met, this would reflect a modest 5.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 149% to CN¥0.99. Before this earnings report, the analysts had been forecasting revenues of CN¥6.03b and earnings per share (EPS) of CN¥1.39 in 2024. Indeed, we can see that the analysts are a lot more bearish about Thunder Software TechnologyLtd's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 18% to CN¥47.34. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Thunder Software TechnologyLtd at CN¥88.00 per share, while the most bearish prices it at CN¥27.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
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. It's pretty clear that there is an expectation that Thunder Software TechnologyLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Thunder Software TechnologyLtd.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Thunder Software TechnologyLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Thunder Software TechnologyLtd's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Thunder Software TechnologyLtd going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Thunder Software TechnologyLtd that we have uncovered.
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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.