Nancal Technology Co.,Ltd Just Missed EPS By 20%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Nancal Technology Co.,Ltd (SHSE:603859), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Earnings fell badly short of analyst estimates, with CN¥1.4b revenues missing by 14%, and statutory earnings per share (EPS) of CN¥1.33 falling short of forecasts by some -20%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Nancal TechnologyLtd

Taking into account the latest results, the consensus forecast from Nancal TechnologyLtd's four analysts is for revenues of CN¥1.82b in 2024. This reflects a huge 29% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 40% to CN¥1.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.03b and earnings per share (EPS) of CN¥2.18 in 2024. Indeed, we can see that the analysts are a lot more bearish about Nancal TechnologyLtd's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥54.43, suggesting the downgrades are not expected to have a long-term impact on Nancal TechnologyLtd's valuation. 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. The most optimistic Nancal TechnologyLtd analyst has a price target of CN¥59.00 per share, while the most pessimistic values it at CN¥50.77. This is a very narrow spread of estimates, implying either that Nancal TechnologyLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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. The analysts are definitely expecting Nancal TechnologyLtd's growth to accelerate, with the forecast 29% annualised growth to the end of 2024 ranking favourably alongside historical growth of 20% 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 17% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Nancal TechnologyLtd is expected to grow much faster than its 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 Nancal TechnologyLtd's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at CN¥54.43, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Nancal TechnologyLtd going out to 2026, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.