It's been a good week for Wuxi Best Precision Machinery Co., Ltd. (SZSE:300580) shareholders, because the company has just released its latest quarterly results, and the shares gained 9.0% to CN¥17.07. Revenues were CN¥345m, 17% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥0.56 being in line with what the analysts forecast. 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. 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 most recent consensus for Wuxi Best Precision Machinery from nine analysts is for revenues of CN¥2.04b in 2025. If met, it would imply a sizeable 48% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 57% to CN¥0.87. Before this earnings report, the analysts had been forecasting revenues of CN¥2.08b and earnings per share (EPS) of CN¥0.90 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in 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¥20.60, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Wuxi Best Precision Machinery, with the most bullish analyst valuing it at CN¥21.75 and the most bearish at CN¥19.90 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
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. The analysts are definitely expecting Wuxi Best Precision Machinery's growth to accelerate, with the forecast 37% annualised growth to the end of 2025 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wuxi Best Precision Machinery 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 Wuxi Best Precision Machinery. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CN¥20.60, 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. At Simply Wall St, we have a full range of analyst estimates for Wuxi Best Precision Machinery 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 Wuxi Best Precision Machinery , 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.
