Haier Smart Home Co., Ltd. (SHSE:600690) last week reported its latest interim results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥136b, statutory earnings beat expectations 6.9%, with Haier Smart Home reporting profits of CN¥0.61 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Haier Smart Home's 26 analysts is for revenues of CN¥272.7b in 2024. This reflects an okay 2.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 30,395% to CN¥2.02. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥280.4b and earnings per share (EPS) of CN¥2.01 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.
The consensus has reconfirmed its price target of CN¥32.52, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Haier Smart Home's market value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Haier Smart Home at CN¥39.30 per share, while the most bearish prices it at CN¥23.00. 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.
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. We can infer from the latest estimates that forecasts expect a continuation of Haier Smart Home'shistorical trends, as the 5.5% annualised revenue growth to the end of 2024 is roughly in line with the 6.9% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 6.3% per year. It's clear that while Haier Smart Home's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. 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. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CN¥32.52, 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 Haier Smart Home. Long-term earnings power is much more important than next year's profits. We have forecasts for Haier Smart Home 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 Haier Smart Home (at least 1 which is a bit unpleasant) , 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.