Avic Aviation High-Technology Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

It's been a good week for Avic Aviation High-Technology Co., Ltd. (SHSE:600862) shareholders, because the company has just released its latest yearly results, and the shares gained 6.2% to CN¥20.75. Revenues came in 9.4% below expectations, at CN¥4.8b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.74 being roughly in line with analyst estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Avic Aviation High-Technology after the latest results.

View our latest analysis for Avic Aviation High-Technology

Taking into account the latest results, the consensus forecast from Avic Aviation High-Technology's eight analysts is for revenues of CN¥5.26b in 2024. This reflects a notable 9.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 34% to CN¥0.82. Before this earnings report, the analysts had been forecasting revenues of CN¥6.51b and earnings per share (EPS) of CN¥0.95 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

The analysts made no major changes to their price target of CN¥27.94, suggesting the downgrades are not expected to have a long-term impact on Avic Aviation High-Technology's 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. Currently, the most bullish analyst values Avic Aviation High-Technology at CN¥30.82 per share, while the most bearish prices it at CN¥24.00. 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.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Avic Aviation High-Technology's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.9% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 19% annually. Factoring in the forecast slowdown in growth, it seems obvious that Avic Aviation High-Technology is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Avic Aviation High-Technology. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.

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 estimates - from multiple Avic Aviation High-Technology analysts - 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 1 warning sign for Avic Aviation High-Technology 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.