Stock Analysis

Yuneng Technology Co., Ltd. Just Missed EPS By 38%: Here's What Analysts Think Will Happen Next

SHSE:688348
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Yuneng Technology Co., Ltd. (SHSE:688348) just released its latest quarterly report and things are not looking great. Unfortunately, Yuneng Technology delivered a serious earnings miss. Revenues of CN¥428m were 11% below expectations, and statutory earnings per share of CN¥0.36 missed estimates by 38%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Yuneng Technology

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SHSE:688348 Earnings and Revenue Growth May 3rd 2024

After the latest results, the three analysts covering Yuneng Technology are now predicting revenues of CN¥2.12b in 2024. If met, this would reflect a major 50% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 117% to CN¥2.79. Before this earnings report, the analysts had been forecasting revenues of CN¥2.14b and earnings per share (EPS) of CN¥2.92 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target fell 6.1% to CN¥76.33, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 Yuneng Technology analyst has a price target of CN¥100.00 per share, while the most pessimistic values it at CN¥55.00. 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. For example, we noticed that Yuneng Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 71% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 12% a year over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 18% annually. So it looks like Yuneng Technology is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Yuneng Technology. 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. 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 Yuneng Technology analysts - 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 Yuneng Technology you should be aware of, and 1 of them can't be ignored.

Valuation is complex, but we're helping make it simple.

Find out whether Yuneng Technology is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.