Wuxi Best Precision Machinery Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Last week, you might have seen that Wuxi Best Precision Machinery Co., Ltd. (SZSE:300580) released its quarterly result to the market. The early response was not positive, with shares down 5.1% to CN¥13.72 in the past week. Revenues came in 5.2% below expectations, at CN¥354m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.56 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wuxi Best Precision Machinery after the latest results.

Check out our latest analysis for Wuxi Best Precision Machinery

After the latest results, the eight analysts covering Wuxi Best Precision Machinery are now predicting revenues of CN¥1.62b in 2024. If met, this would reflect a solid 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 21% to CN¥0.67. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.69b and earnings per share (EPS) of CN¥0.70 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of CN¥21.15, suggesting the downgrades are not expected to have a long-term impact on Wuxi Best Precision Machinery's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Wuxi Best Precision Machinery at CN¥22.00 per share, while the most bearish prices it at CN¥20.30. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Wuxi Best Precision Machinery's rate of growth is expected to accelerate meaningfully, with the forecast 33% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Wuxi Best Precision Machinery to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Wuxi Best Precision Machinery's revenue estimates, but industry data suggests that it is expected to grow faster than 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 Wuxi Best Precision Machinery. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Wuxi Best Precision Machinery going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Wuxi Best Precision Machinery that we have uncovered.

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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.