As you might know, 37 Interactive Entertainment Network Technology Group Co., Ltd. (SZSE:002555) last week released its latest half-yearly, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥9.2b, statutory earnings missed forecasts by 17%, coming in at just CN¥0.29 per share. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
After the latest results, the 15 analysts covering 37 Interactive Entertainment Network Technology Group are now predicting revenues of CN¥18.8b in 2024. If met, this would reflect a modest 4.2% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 4.6% to CN¥1.28. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥19.2b and earnings per share (EPS) of CN¥1.52 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a real cut to earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.1% to CN¥22.20. 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. The most optimistic 37 Interactive Entertainment Network Technology Group analyst has a price target of CN¥33.00 per share, while the most pessimistic values it at CN¥12.00. 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.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting 37 Interactive Entertainment Network Technology Group's growth to accelerate, with the forecast 8.6% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 13% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, 37 Interactive Entertainment Network Technology Group is expected to grow slower than 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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of 37 Interactive Entertainment Network Technology Group's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on 37 Interactive Entertainment Network Technology Group. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for 37 Interactive Entertainment Network Technology Group 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 37 Interactive Entertainment Network Technology Group 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.
