Last week saw the newest third-quarter earnings release from Guangdong KinLong Hardware Products Co.,Ltd. (SZSE:002791), an important milestone in the company's journey to build a stronger business. Revenues of CN¥1.7b missed forecasts by 16%, but despite this Guangdong KinLong Hardware ProductsLtd reported a surprise statutory profit instead of the losses that the analysts had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

After the latest results, the nine analysts covering Guangdong KinLong Hardware ProductsLtd are now predicting revenues of CN¥8.32b in 2025. If met, this would reflect a decent 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 137% to CN¥1.43. In the lead-up to this report, the analysts had been modelling revenues of CN¥8.57b and earnings per share (EPS) of CN¥1.50 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 25% to CN¥27.13. 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. The most optimistic Guangdong KinLong Hardware ProductsLtd analyst has a price target of CN¥34.40 per share, while the most pessimistic values it at CN¥19.50. 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.

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 Guangdong KinLong Hardware ProductsLtd's rate of growth is expected to accelerate meaningfully, with the forecast 13% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.0% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Guangdong KinLong Hardware ProductsLtd is expected to grow at about the same rate as 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 Guangdong KinLong Hardware ProductsLtd. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Guangdong KinLong Hardware ProductsLtd analysts - 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 1 warning sign for Guangdong KinLong Hardware ProductsLtd 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.