As you might know, Suzhou Sushi Testing Group Co.,Ltd. (SZSE:300416) last week released its latest quarterly, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥474m) coming in 48% below what they had expected. Statutory earnings per share of CN¥0.12 fell 57% short. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the latest results, Suzhou Sushi Testing GroupLtd's six analysts are now forecasting revenues of CN¥2.23b in 2024. This would be an okay 7.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 15% to CN¥0.64. Before this earnings report, the analysts had been forecasting revenues of CN¥2.53b and earnings per share (EPS) of CN¥0.77 in 2024. Indeed, we can see that the analysts are a lot more bearish about Suzhou Sushi Testing GroupLtd's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥19.63, suggesting the downgrades are not expected to have a long-term impact on Suzhou Sushi Testing GroupLtd's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Suzhou Sushi Testing GroupLtd, with the most bullish analyst valuing it at CN¥23.70 and the most bearish at CN¥14.50 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 pretty clear that there is an expectation that Suzhou Sushi Testing GroupLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 16% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this to the 389 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 18% per year. Factoring in the forecast slowdown in growth, it looks like Suzhou Sushi Testing GroupLtd is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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 held steady at CN¥19.63, 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 Suzhou Sushi Testing GroupLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Suzhou Sushi Testing GroupLtd analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Suzhou Sushi Testing GroupLtd that you should be aware of.

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