Shenzhen Envicool Technology Co., Ltd. (SZSE:002837) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Results overall were respectable, with statutory earnings of CN¥0.47 per share roughly in line with what the analysts had forecast. Revenues of CN¥967m came in 5.8% ahead of analyst predictions. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the current consensus from Shenzhen Envicool Technology's 15 analysts is for revenues of CN¥4.85b in 2024. This would reflect a major 21% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 26% to CN¥0.74. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.76b and earnings per share (EPS) of CN¥0.71 in 2024. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades,the analysts have not made any major changes to their price target of CN¥28.90, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Shenzhen Envicool Technology at CN¥33.65 per share, while the most bearish prices it at CN¥23.60. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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 clear from the latest estimates that Shenzhen Envicool Technology's rate of growth is expected to accelerate meaningfully, with the forecast 47% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 24% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Shenzhen Envicool Technology is expected to grow much faster than its industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Shenzhen Envicool Technology following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Shenzhen Envicool Technology analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Shenzhen Envicool Technology .
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