Zhejiang HangKe Technology Incorporated Company Just Missed EPS By 53%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Zhejiang HangKe Technology Incorporated Company (SHSE:688006), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥1.0b missed by 18%, and statutory earnings per share of CN¥0.16 fell short of forecasts by 53%. 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 Zhejiang HangKe Technology after the latest results.

See our latest analysis for Zhejiang HangKe Technology

Taking into account the latest results, the consensus forecast from Zhejiang HangKe Technology's six analysts is for revenues of CN¥4.00b in 2024. This reflects a modest 7.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 62% to CN¥1.62. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.76b and earnings per share (EPS) of CN¥1.66 in 2024. It looks like sentiment has fallen somewhat in the aftermath of these results, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.4% to CN¥24.52. 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 Zhejiang HangKe Technology at CN¥30.00 per share, while the most bearish prices it at CN¥17.00. 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 Zhejiang HangKe Technology shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Zhejiang HangKe Technology's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 27% over the past five years. Compare this to the 301 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 16% per year. So it's pretty clear that, while Zhejiang HangKe Technology's revenue growth is expected to slow, it's expected to grow roughly in line with the 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 their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Zhejiang HangKe Technology's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Zhejiang HangKe Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for Zhejiang HangKe Technology going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Zhejiang HangKe Technology (of which 1 is a bit concerning!) you should know about.

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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.