Investors in Wingtech Technology Co.,Ltd (SHSE:600745) had a good week, as its shares rose 3.9% to close at CN¥26.10 following the release of its second-quarter results. The results don't look great, especially considering that the analysts had been forecasting a profit and Wingtech TechnologyLtd delivered a statutory loss of CN¥0.01 per share. Revenues of CN¥17b did beat expectations by 8.0% though. 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 nine analysts covering Wingtech TechnologyLtd are now predicting revenues of CN¥68.0b in 2024. If met, this would reflect a credible 3.7% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 2,404% to CN¥1.43. Before this earnings report, the analysts had been forecasting revenues of CN¥67.5b and earnings per share (EPS) of CN¥1.55 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥48.02, 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 Wingtech TechnologyLtd, with the most bullish analyst valuing it at CN¥115 and the most bearish at CN¥30.10 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the 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. We would highlight that Wingtech TechnologyLtd's revenue growth is expected to slow, with the forecast 7.6% annualised growth rate until the end of 2024 being well below the historical 10% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. Factoring in the forecast slowdown in growth, it seems obvious that Wingtech TechnologyLtd is also expected to grow slower than other industry participants.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Wingtech TechnologyLtd. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Wingtech TechnologyLtd's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Wingtech TechnologyLtd 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 2 warning signs for Wingtech TechnologyLtd 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.
