Earnings Report: Pylon Technologies Co., Ltd. Missed Revenue Estimates By 53%

Investors in Pylon Technologies Co., Ltd. (SHSE:688063) had a good week, as its shares rose 7.0% to close at CN¥79.22 following the release of its quarterly results. Revenues were CN¥386m, 53% shy of what the analysts were expecting, although statutory earnings of CN¥2.97 per share were roughly in line with what was forecast. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Pylon Technologies

Following the latest results, Pylon Technologies' five analysts are now forecasting revenues of CN¥4.80b in 2024. This would be a huge 160% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 1,200% to CN¥4.31. In the lead-up to this report, the analysts had been modelling revenues of CN¥4.35b and earnings per share (EPS) of CN¥3.60 in 2024. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

Despite these upgrades, the consensus price target fell 7.6% to CN¥91.18, perhaps signalling that the uplift in performance is not expected to last. 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. The most optimistic Pylon Technologies analyst has a price target of CN¥108 per share, while the most pessimistic values it at CN¥77.70. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Pylon Technologies' growth to accelerate, with the forecast 258% annualised growth to the end of 2024 ranking favourably alongside historical growth of 34% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Pylon Technologies is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Pylon Technologies following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to 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.

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 Pylon Technologies analysts - 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 Pylon Technologies (at least 2 which can't be ignored) , and understanding these should be part of your investment process.

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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.