China East Education Holdings Limited (HKG:667) shareholders are probably feeling a little disappointed, since its shares fell 6.2% to HK$2.27 in the week after its latest half-yearly results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥2.0b, statutory earnings were in line with expectations, at CN¥0.12 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the most recent consensus for China East Education Holdings from nine analysts is for revenues of CN¥4.16b in 2024. If met, it would imply a reasonable 3.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 27% to CN¥0.20. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.30b and earnings per share (EPS) of CN¥0.17 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a nice gain to their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The average price target rose 9.6% to HK$3.71, with the analysts signalling that the improved earnings outlook is the key driver of value for shareholders - enough to offset the reduction in revenue estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values China East Education Holdings at HK$5.50 per share, while the most bearish prices it at HK$2.84. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. It's clear from the latest estimates that China East Education Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 7.6% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.5% 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. It seems obvious that, while the future growth outlook is brighter than the recent past, China East Education Holdings is expected to grow slower than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around China East Education Holdings' earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for China East Education Holdings 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 1 warning sign for China East Education Holdings 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.