Earnings Report: Guizhou Aviation Technical Development Co., Ltd Missed Revenue Estimates By 13%

It's been a good week for Guizhou Aviation Technical Development Co., Ltd (SHSE:688239) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.2% to CN¥34.57. Revenues were CN¥578m, 13% below analyst expectations, although losses didn't appear to worsen significantly, with a statutory per-share loss of CN¥1.29 being in line with what the analysts anticipated. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Guizhou Aviation Technical Development after the latest results.

Check out our latest analysis for Guizhou Aviation Technical Development

Taking into account the latest results, the most recent consensus for Guizhou Aviation Technical Development from six analysts is for revenues of CN¥2.82b in 2024. If met, it would imply a major 34% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 78% to CN¥2.24. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.84b and earnings per share (EPS) of CN¥2.58 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

The average price target fell 15% to CN¥65.49, with reduced earnings forecasts clearly tied to a lower valuation estimate. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Guizhou Aviation Technical Development analyst has a price target of CN¥86.17 per share, while the most pessimistic values it at CN¥44.80. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guizhou Aviation Technical Development's past performance and to peers in the same industry. The analysts are definitely expecting Guizhou Aviation Technical Development's growth to accelerate, with the forecast 48% annualised growth to the end of 2024 ranking favourably alongside historical growth of 32% 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 20% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Guizhou Aviation Technical Development is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Guizhou Aviation Technical Development. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue 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 Guizhou Aviation Technical Development's future valuation.

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 Guizhou Aviation Technical Development going out to 2026, and you can see them free on our platform here..

Even so, be aware that Guizhou Aviation Technical Development is showing 4 warning signs in our investment analysis , 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.