As you might know, Sangfor Technologies Inc. (SZSE:300454) last week released its latest third-quarter, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥1.9b, statutory earnings missed forecasts by an incredible 84%, coming in at just CN¥0.03 per share. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Sangfor Technologies' 17 analysts is for revenues of CN¥8.95b in 2025. This reflects a notable 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 165% to CN¥1.04. Before this earnings report, the analysts had been forecasting revenues of CN¥9.00b and earnings per share (EPS) of CN¥1.05 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target rose 6.8% to CN¥65.27despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Sangfor Technologies' earnings by assigning a price premium. 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 Sangfor Technologies, with the most bullish analyst valuing it at CN¥93.00 and the most bearish at CN¥30.80 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Sangfor Technologies' growth to accelerate, with the forecast 15% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% 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. Factoring in the forecast acceleration in revenue, it's pretty clear that Sangfor Technologies is expected to grow at about the same rate as the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that in mind, we wouldn't be too quick to come to a conclusion on Sangfor Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for Sangfor Technologies 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 3 warning signs for Sangfor Technologies you should be aware of, and 1 of them can't be ignored.
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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.
