Zhongji Innolight Co., Ltd. (SZSE:300308) just released its latest second-quarter results and things are looking bullish. The company beat forecasts, with revenue of CN¥6.0b, some 2.7% above estimates, and statutory earnings per share (EPS) coming in at CN¥1.23, 21% ahead of expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 23 analysts covering Zhongji Innolight are now predicting revenues of CN¥25.6b in 2024. If met, this would reflect a huge 46% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 37% to CN¥4.89. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥26.0b and earnings per share (EPS) of CN¥4.62 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
There's been no major changes to the consensus price target of CN¥173, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 Zhongji Innolight at CN¥220 per share, while the most bearish prices it at CN¥89.50. 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.
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. It's clear from the latest estimates that Zhongji Innolight's rate of growth is expected to accelerate meaningfully, with the forecast 114% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 22% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Zhongji Innolight to grow faster 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 Zhongji Innolight's earnings potential next year. 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¥173, with the latest estimates not enough to have an impact on their price targets.
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 Zhongji Innolight going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Zhongji Innolight (at least 1 which makes us a bit uncomfortable) , and understanding these should be part of your investment process.
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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.
