Analysts Have Lowered Expectations For Neway CNC Equipment (Suzhou) Co., Ltd. (SHSE:688697) After Its Latest Results

Neway CNC Equipment (Suzhou) Co., Ltd. (SHSE:688697) just released its latest yearly report and things are not looking great. Results look to have been somewhat negative - revenue fell 2.1% short of analyst estimates at CN¥2.3b, and statutory earnings of CN¥0.97 per share missed forecasts by 3.0%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Neway CNC Equipment (Suzhou)

Taking into account the latest results, the current consensus from Neway CNC Equipment (Suzhou)'s three analysts is for revenues of CN¥2.73b in 2024. This would reflect a meaningful 17% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 19% to CN¥1.16. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.90b and earnings per share (EPS) of CN¥1.25 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to CN¥25.72. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Neway CNC Equipment (Suzhou) at CN¥27.00 per share, while the most bearish prices it at CN¥24.43. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. We can infer from the latest estimates that forecasts expect a continuation of Neway CNC Equipment (Suzhou)'shistorical trends, as the 17% annualised revenue growth to the end of 2024 is roughly in line with the 18% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 19% annually. It's clear that while Neway CNC Equipment (Suzhou)'s revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Neway CNC Equipment (Suzhou). Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

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 Neway CNC Equipment (Suzhou) going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 2 warning signs we've spotted with Neway CNC Equipment (Suzhou) .

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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.