Revenue Miss: Ningbo Ronbay New Energy Technology Co.,Ltd. Fell 10% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

Investors in Ningbo Ronbay New Energy Technology Co.,Ltd. (SHSE:688005) had a good week, as its shares rose 7.7% to close at CN¥23.00 following the release of its first-quarter results. Revenues were CN¥3.7b, 10% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥1.27 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.

Check out our latest analysis for Ningbo Ronbay New Energy TechnologyLtd

Taking into account the latest results, the current consensus, from the nine analysts covering Ningbo Ronbay New Energy TechnologyLtd, is for revenues of CN¥16.2b in 2024. This implies a discernible 2.4% reduction in Ningbo Ronbay New Energy TechnologyLtd's revenue over the past 12 months. Per-share earnings are expected to leap 105% to CN¥0.90. In the lead-up to this report, the analysts had been modelling revenues of CN¥21.7b and earnings per share (EPS) of CN¥1.49 in 2024. Indeed, we can see that the analysts are a lot more bearish about Ningbo Ronbay New Energy TechnologyLtd's prospects following the latest results, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.1% to CN¥39.67. 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 Ningbo Ronbay New Energy TechnologyLtd analyst has a price target of CN¥54.00 per share, while the most pessimistic values it at CN¥18.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We would highlight that revenue is expected to reverse, with a forecast 3.2% annualised decline to the end of 2024. That is a notable change from historical growth of 41% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 16% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Ningbo Ronbay New Energy TechnologyLtd is expected to lag the wider 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 Ronbay New Energy TechnologyLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Ningbo Ronbay New Energy TechnologyLtd's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Ningbo Ronbay New Energy TechnologyLtd going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Ningbo Ronbay New Energy TechnologyLtd , and understanding them should be part of your investment process.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com