Investors in Angel Yeast Co., Ltd (SHSE:600298) had a good week, as its shares rose 3.5% to close at CN¥30.51 following the release of its quarterly results. Revenues were CN¥3.7b, approximately in line with expectations, although statutory earnings per share (EPS) performed substantially better. EPS of CN¥0.43 were also better than expected, beating analyst predictions by 15%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

After the latest results, the 15 analysts covering Angel Yeast are now predicting revenues of CN¥15.2b in 2024. If met, this would reflect a notable 8.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to rise 5.4% to CN¥1.59. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥15.5b and earnings per share (EPS) of CN¥1.56 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of CN¥33.62, showing that the business is executing well and in line with expectations. 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. There are some variant perceptions on Angel Yeast, with the most bullish analyst valuing it at CN¥38.39 and the most bearish at CN¥23.80 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 17% growth on an annualised basis. That is in line with its 14% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So although Angel Yeast is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CN¥33.62, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Angel Yeast. Long-term earnings power is much more important than next year's profits. We have forecasts for Angel Yeast going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Angel Yeast (1 is a bit concerning) you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.