Shareholders of Greentown Service Group Co. Ltd. (HKG:2869) will be pleased this week, given that the stock price is up 13% to HK$3.62 following its latest half-yearly results. It looks like the results were a bit of a negative overall. While revenues of CN¥9.1b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 5.9% to hit CN¥0.16 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Greentown Service Group from 21 analysts is for revenues of CN¥19.4b in 2024. If met, it would imply a satisfactory 6.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to expand 10% to CN¥0.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥19.6b and earnings per share (EPS) of CN¥0.24 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 consensus price target rose 6.2% to HK$4.10despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Greentown Service Group's earnings by assigning a price premium. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Greentown Service Group at HK$6.22 per share, while the most bearish prices it at HK$3.04. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. We would highlight that Greentown Service Group's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2024 being well below the historical 18% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.3% annually. Even after the forecast slowdown in growth, it seems obvious that Greentown Service Group is also 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. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Greentown Service Group 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 Greentown Service Group .
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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.
