Revenue Miss: KEDE Numerical Control Co., Ltd. Fell 7.7% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

The analysts might have been a bit too bullish on KEDE Numerical Control Co., Ltd. (SHSE:688305), given that the company fell short of expectations when it released its annual results last week. KEDE Numerical Control missed analyst forecasts, with revenues of CN¥605m and statutory earnings per share (EPS) of CN¥1.32, falling short by 7.7% and 2.7% respectively. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for KEDE Numerical Control

Following the latest results, KEDE Numerical Control's five analysts are now forecasting revenues of CN¥820.0m in 2025. This would be a substantial 35% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 53% to CN¥1.96. Before this earnings report, the analysts had been forecasting revenues of CN¥938.6m and earnings per share (EPS) of CN¥1.96 in 2025. Indeed we can see that the consensus opinion has undergone some fundamental changes following the latest results, with a substantial drop in revenues and some minor tweaks to earnings numbers.

The consensus has reconfirmed its price target of CN¥81.16, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on KEDE Numerical Control's market value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values KEDE Numerical Control at CN¥96.31 per share, while the most bearish prices it at CN¥69.10. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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. It's clear from the latest estimates that KEDE Numerical Control's rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 26% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect KEDE Numerical Control to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Even so, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CN¥81.16, with the latest estimates not enough to have an impact on their price targets.

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 KEDE Numerical Control analysts - going out to 2026, and you can see them free on our platform here.

We also provide an overview of the KEDE Numerical Control Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.