As you might know, Qingdao Gaoce Technology Co., Ltd (SHSE:688556) recently reported its annual numbers. Results were roughly in line with estimates, with revenues of CN¥6.2b and statutory earnings per share of CN¥4.37. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Qingdao Gaoce Technology after the latest results.
Taking into account the latest results, the consensus forecast from Qingdao Gaoce Technology's ten analysts is for revenues of CN¥6.86b in 2024. This reflects a decent 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to sink 14% to CN¥3.69 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.32b and earnings per share (EPS) of CN¥3.52 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
As a result, it might be a surprise to see thatthe analysts have cut their price target 7.1% to CN¥42.18, which could suggest the forecast improvement in performance is not expected to last. 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. The most optimistic Qingdao Gaoce Technology analyst has a price target of CN¥66.00 per share, while the most pessimistic values it at CN¥30.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. We would highlight that Qingdao Gaoce Technology's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2024 being well below the historical 52% 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 23% annually. Factoring in the forecast slowdown in growth, it seems obvious that Qingdao Gaoce Technology is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Qingdao Gaoce Technology's earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse 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.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Qingdao Gaoce Technology analysts - going out to 2026, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Qingdao Gaoce Technology (1 is a bit unpleasant!) that you should be aware of.
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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.