Investors in Hoymiles Power Electronics Inc. (SHSE:688032) had a good week, as its shares rose 5.1% to close at CN¥132 following the release of its second-quarter results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥576m, statutory earnings were in line with expectations, at CN¥0.97 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Following the latest results, Hoymiles Power Electronics' three analysts are now forecasting revenues of CN¥2.57b in 2024. This would be a substantial 37% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 48% to CN¥4.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.91b and earnings per share (EPS) of CN¥5.41 in 2024. Indeed, we can see that the analysts are a lot more bearish about Hoymiles Power Electronics' prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥176, suggesting the downgrades are not expected to have a long-term impact on Hoymiles Power Electronics' valuation. 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 Hoymiles Power Electronics at CN¥201 per share, while the most bearish prices it at CN¥158. This is a very narrow spread of estimates, implying either that Hoymiles Power Electronics is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hoymiles Power Electronics' past performance and to peers in the same industry. The analysts are definitely expecting Hoymiles Power Electronics' growth to accelerate, with the forecast 89% annualised growth to the end of 2024 ranking favourably alongside historical growth of 37% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Hoymiles Power Electronics to grow faster 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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at CN¥176, 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 Hoymiles Power Electronics going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 4 warning signs for Hoymiles Power Electronics you should be aware of, and 3 of them don't sit too well with us.

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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.