It's been a pretty great week for Rigol Technologies Co., Ltd. (SHSE:688337) shareholders, with its shares surging 18% to CN¥43.59 in the week since its latest quarterly results. Rigol Technologies reported in line with analyst predictions, delivering revenues of CN¥156m and statutory earnings per share of CN¥0.60, suggesting the business is executing well and in line with its plan. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Rigol Technologies' three analysts is for revenues of CN¥783.0m in 2024. This would reflect a satisfactory 6.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 21% to CN¥0.62. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥843.3m and earnings per share (EPS) of CN¥0.73 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.
It'll come as no surprise then, to learn that the analysts have cut their price target 34% to CN¥31.12.
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 can infer from the latest estimates that forecasts expect a continuation of Rigol Technologies'historical trends, as the 14% annualised revenue growth to the end of 2024 is roughly in line with the 16% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So although Rigol Technologies is expected to maintain its revenue growth rate, it's forecast 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 Rigol Technologies. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Rigol Technologies' future valuation.
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 Rigol Technologies going out to 2026, and you can see them free on our platform here..
Plus, you should also learn about the 4 warning signs we've spotted with Rigol Technologies (including 2 which make us uncomfortable) .
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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.
