Investors in Offcn Education Technology Co., Ltd. (SZSE:002607) had a good week, as its shares rose 5.8% to close at CN¥3.30 following the release of its quarterly results. Revenues were CN¥653m, 20% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥0.01 being in line with what the analysts forecast. 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. 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 Offcn Education Technology's three analysts is for revenues of CN¥4.11b in 2025. This would reflect a major 63% increase on its revenue over the past 12 months. Offcn Education Technology is also expected to turn profitable, with statutory earnings of CN¥0.13 per share. Before this earnings report, the analysts had been forecasting revenues of CN¥4.15b and earnings per share (EPS) of CN¥0.13 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
The consensus price target rose 22% to CN¥2.43despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Offcn Education Technology's 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 Offcn Education Technology, with the most bullish analyst valuing it at CN¥3.00 and the most bearish at CN¥1.35 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that Offcn Education Technology is forecast to grow faster in the future than it has in the past, with revenues expected to display 48% annualised growth until the end of 2025. If achieved, this would be a much better result than the 26% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 25% per year. So it looks like Offcn Education Technology is expected to grow faster than its competitors, at least for a while.
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. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than 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 Offcn Education Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for Offcn Education Technology 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 Offcn Education Technology you should know about.
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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.
