As you might know, Chongqing Fuling Zhacai Group Co., Ltd. (SZSE:002507) last week released its latest second-quarter, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with CN¥557m revenue coming in 5.3% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.15 missed the mark badly, arriving some 21% below what was expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the latest results, Chongqing Fuling Zhacai Group's eleven analysts are now forecasting revenues of CN¥2.58b in 2024. This would be a reasonable 6.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 2.6% to CN¥0.72. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.66b and earnings per share (EPS) of CN¥0.79 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The consensus price target fell 8.9% to CN¥14.13, with the weaker earnings outlook clearly leading valuation estimates. 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 Chongqing Fuling Zhacai Group at CN¥16.00 per share, while the most bearish prices it at CN¥11.70. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's clear from the latest estimates that Chongqing Fuling Zhacai Group's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 11% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Chongqing Fuling Zhacai Group 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 Chongqing Fuling Zhacai Group. 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 fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Chongqing Fuling Zhacai Group's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Chongqing Fuling Zhacai Group going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Chongqing Fuling Zhacai Group you should know about.

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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.