It's been a good week for Piotech Inc. (SHSE:688072) shareholders, because the company has just released its latest second-quarter results, and the shares gained 4.5% to CN¥125. Revenues came in 5.7% below expectations, at CN¥795m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥2.40 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the most recent consensus for Piotech from eight analysts is for revenues of CN¥3.96b in 2024. If met, it would imply a substantial 33% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 18% to CN¥2.85. Before this earnings report, the analysts had been forecasting revenues of CN¥4.01b and earnings per share (EPS) of CN¥3.18 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥201, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on 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 Piotech, with the most bullish analyst valuing it at CN¥262 and the most bearish at CN¥145 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. The analysts are definitely expecting Piotech's growth to accelerate, with the forecast 78% annualised growth to the end of 2024 ranking favourably alongside historical growth of 36% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Piotech to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Piotech. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CN¥201, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Piotech analysts - 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 1 warning sign with Piotech , and understanding it 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.