As you might know, Hangzhou Hikvision Digital Technology Co., Ltd. (SZSE:002415) last week released its latest third-quarter, and things did not turn out so great for shareholders. Results showed a clear earnings miss, with CN¥24b revenue coming in 9.7% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.34 missed the mark badly, arriving some 27% 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. 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 current consensus from Hangzhou Hikvision Digital Technology's 16 analysts is for revenues of CN¥110.4b in 2025. This would reflect a decent 19% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 32% to CN¥1.91. Before this earnings report, the analysts had been forecasting revenues of CN¥111.4b and earnings per share (EPS) of CN¥1.96 in 2025. 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.
The consensus price target held steady at CN¥37.15, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Hangzhou Hikvision Digital Technology, with the most bullish analyst valuing it at CN¥47.34 and the most bearish at CN¥30.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hangzhou Hikvision Digital Technology's past performance and to peers in the same industry. The analysts are definitely expecting Hangzhou Hikvision Digital Technology's growth to accelerate, with the forecast 15% annualised growth to the end of 2025 ranking favourably alongside historical growth of 10% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 18% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Hangzhou Hikvision Digital Technology is expected to grow slower 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 Hangzhou Hikvision Digital Technology. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Hangzhou Hikvision Digital Technology's revenue is expected to perform worse than the wider industry. The consensus price target held steady at CN¥37.15, 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. We have forecasts for Hangzhou Hikvision Digital Technology going out to 2026, and you can see them free on our platform here.
It is also worth noting that we have found 1 warning sign for Hangzhou Hikvision Digital Technology that you need to take into consideration.
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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.
