Shareholders might have noticed that Shanghai Baosight Software Co.,Ltd. (SHSE:600845) filed its yearly result this time last week. The early response was not positive, with shares down 3.9% to CN¥37.20 in the past week. It was a negative result overall, with revenues coming in 18% less than what the analysts expected, at CN¥13b. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

After the latest results, the twelve analysts covering Shanghai Baosight SoftwareLtd are now predicting revenues of CN¥15.4b in 2024. If met, this would reflect a notable 19% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 26% to CN¥1.34. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥19.5b and earnings per share (EPS) of CN¥1.43 in 2024. It looks like sentiment has fallen somewhat in the aftermath of these results, with a large cut to revenue estimates and a small dip in earnings per share numbers as well.

The consensus price target fell 6.2% to CN¥52.01, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Shanghai Baosight SoftwareLtd at CN¥67.35 per share, while the most bearish prices it at CN¥45.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shanghai Baosight SoftwareLtd shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 19% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 22% annually. It's clear that while Shanghai Baosight SoftwareLtd's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shanghai Baosight SoftwareLtd. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Shanghai Baosight SoftwareLtd's future valuation.

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 Shanghai Baosight SoftwareLtd analysts - 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 1 warning sign for Shanghai Baosight SoftwareLtd 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.