Ningbo Haitian Precision Machinery Co.,Ltd. (SHSE:601882) Just Recorded An Earnings Miss And Analysts Are Updating Their Numbers

Ningbo Haitian Precision Machinery Co.,Ltd. (SHSE:601882) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥922m missed by 20%, and statutory earnings per share of CN¥0.31 fell short of forecasts by 23%. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Ningbo Haitian Precision MachineryLtd

Taking into account the latest results, the consensus forecast from Ningbo Haitian Precision MachineryLtd's six analysts is for revenues of CN¥3.75b in 2024. This reflects a notable 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 17% to CN¥1.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.87b and earnings per share (EPS) of CN¥1.38 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The consensus price target fell 9.5% to CN¥31.52, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Ningbo Haitian Precision MachineryLtd, with the most bullish analyst valuing it at CN¥35.50 and the most bearish at CN¥24.07 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Ningbo Haitian Precision MachineryLtd shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Ningbo Haitian Precision MachineryLtd's growth to accelerate, with the forecast 28% annualised growth to the end of 2024 ranking favourably alongside historical growth of 23% per annum 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 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ningbo Haitian Precision MachineryLtd is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ningbo Haitian Precision MachineryLtd. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ningbo Haitian Precision MachineryLtd analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Ningbo Haitian Precision MachineryLtd 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.