Shareholders of TCL Technology Group Corporation (SZSE:000100) will be pleased this week, given that the stock price is up 16% to CN¥5.19 following its latest quarterly results. It looks like a pretty bad result, all things considered. Although revenues of CN¥43b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 61% to hit CN¥0.03 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on TCL Technology Group after the latest results.
After the latest results, the eleven analysts covering TCL Technology Group are now predicting revenues of CN¥200.4b in 2025. If met, this would reflect a substantial 22% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 211% to CN¥0.36. In the lead-up to this report, the analysts had been modelling revenues of CN¥200.5b and earnings per share (EPS) of CN¥0.37 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.
It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥5.09, 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. The most optimistic TCL Technology Group analyst has a price target of CN¥5.80 per share, while the most pessimistic values it at CN¥4.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that TCL Technology Group's revenue growth is expected to slow, with the forecast 17% annualised growth rate until the end of 2025 being well below the historical 22% p.a. growth over the last five years. Compare this to the 389 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 18% per year. So it's pretty clear that, while TCL Technology Group's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for TCL Technology Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on TCL Technology Group. Long-term earnings power is much more important than next year's profits. We have forecasts for TCL Technology 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 2 warning signs for TCL Technology Group (of which 1 is concerning!) you should know about.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
