The analysts might have been a bit too bullish on DBAPPSecurity Co., Ltd. (SHSE:688023), given that the company fell short of expectations when it released its first-quarter results last week. Statutory earnings fell substantially short of expectations, with revenues of CN¥281m missing forecasts by 37%. Losses exploded, with a per-share loss of CN¥2.54 some 257% below prior forecasts. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on DBAPPSecurity after the latest results.
After the latest results, the eight analysts covering DBAPPSecurity are now predicting revenues of CN¥2.44b in 2024. If met, this would reflect a meaningful 15% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 95% to CN¥0.24. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥2.45b and losses of CN¥0.16 per share in 2024. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 18% to CN¥140, with the analysts signalling that growing losses would be a definite concern. 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 DBAPPSecurity at CN¥192 per share, while the most bearish prices it at CN¥75.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting DBAPPSecurity's growth to accelerate, with the forecast 21% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. DBAPPSecurity is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall 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.
With that in mind, we wouldn't be too quick to come to a conclusion on DBAPPSecurity. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for DBAPPSecurity going out to 2026, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.