Zhuhai CosMX Battery Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's shaping up to be a tough period for Zhuhai CosMX Battery Co., Ltd. (SHSE:688772), which a week ago released some disappointing full-year results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with CN¥11b revenue coming in 4.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.30 missed the mark badly, arriving some 20% below what was expected. 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Zhuhai CosMX Battery

Taking into account the latest results, the consensus forecast from Zhuhai CosMX Battery's seven analysts is for revenues of CN¥13.6b in 2024. This reflects a notable 19% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 161% to CN¥0.80. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥12.8b and earnings per share (EPS) of CN¥0.83 in 2024. Overall it looks as though the analysts were a bit mixed on the latest results. Although there was a a notable to revenue, the consensus also made a small dip in its earnings per share forecasts.

The consensus price target fell 16% to CN¥21.00, suggesting that the analysts are primarily focused on earnings as the driver of value for this business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Zhuhai CosMX Battery at CN¥22.00 per share, while the most bearish prices it at CN¥19.00. 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.

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 Zhuhai CosMX Battery's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhuhai CosMX Battery is expected to grow at about the same rate as the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zhuhai CosMX Battery. They also upgraded their revenue forecasts, although the latest estimates suggest that Zhuhai CosMX Battery will grow in line with the overall 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Zhuhai CosMX Battery. Long-term earnings power is much more important than next year's profits. We have forecasts for Zhuhai CosMX Battery going out to 2026, and you can see them free on our platform here.

Even so, be aware that Zhuhai CosMX Battery is showing 2 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.