Pylon Technologies Co., Ltd. Just Missed EPS By 35%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Pylon Technologies Co., Ltd. (SHSE:688063), given that the company fell short of expectations when it released its yearly results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥3.3b missed by 16%, and statutory earnings per share of CN¥2.97 fell short of forecasts by 35%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Pylon Technologies

Following the latest results, Pylon Technologies' five analysts are now forecasting revenues of CN¥4.35b in 2024. This would be a huge 32% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 22% to CN¥3.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥4.81b and earnings per share (EPS) of CN¥9.03 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

The consensus price target fell 13% to CN¥98.65, with the weaker earnings outlook clearly leading valuation estimates. 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 Pylon Technologies at CN¥108 per share, while the most bearish prices it at CN¥89.60. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. We would highlight that Pylon Technologies' revenue growth is expected to slow, with the forecast 32% annualised growth rate until the end of 2024 being well below the historical 43% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. Even after the forecast slowdown in growth, it seems obvious that Pylon Technologies is also expected to grow faster than the wider 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 Pylon Technologies' revenue estimates, but industry data suggests that it is expected to grow faster 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 Pylon Technologies' 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 Pylon Technologies going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 3 warning signs for Pylon Technologies you should be aware of, and 1 of them can't be ignored.

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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.