Foryou Corporation Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Last week saw the newest second-quarter earnings release from Foryou Corporation (SZSE:002906), an important milestone in the company's journey to build a stronger business. Revenues were CN¥2.2b, 12% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥0.27 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Foryou

After the latest results, the eleven analysts covering Foryou are now predicting revenues of CN¥9.27b in 2024. If met, this would reflect a meaningful 9.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 13% to CN¥1.23. Before this earnings report, the analysts had been forecasting revenues of CN¥9.02b and earnings per share (EPS) of CN¥1.20 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.

Even though revenue forecasts increased, there was no change to the consensus price target of CN¥36.97, suggesting the analysts are focused on earnings as the driver of value creation. 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. There are some variant perceptions on Foryou, with the most bullish analyst valuing it at CN¥50.00 and the most bearish at CN¥25.50 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 Foryou'shistorical trends, as the 20% annualised revenue growth to the end of 2024 is roughly in line with the 20% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 17% per year. So although Foryou is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue forecasts, although the latest estimates suggest that Foryou will grow in line with the overall industry. The consensus price target held steady at CN¥36.97, with the latest estimates not enough to have an impact on their price targets.

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 forecasts for Foryou going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Foryou (1 is concerning!) that 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.