Results: Zoomlion Heavy Industry Science and Technology Co., Ltd. Confounded Analyst Expectations With A Surprise Profit

Zoomlion Heavy Industry Science and Technology Co., Ltd. (SZSE:000157) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to CN¥6.32 in the week after its latest half-year results. It was a shocking result from a revenue perspective, with revenues falling 100% short of analyst expectations. There was one bright spot though, with Zoomlion Heavy Industry Science and Technology reporting a surprise (statutory) profit of CN¥0.16, defying analyst expectations of a loss. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Zoomlion Heavy Industry Science and Technology

Taking into account the latest results, the most recent consensus for Zoomlion Heavy Industry Science and Technology from twelve analysts is for revenues of CN¥53.9b in 2024. If met, it would imply a notable 13% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 20% to CN¥0.52. In the lead-up to this report, the analysts had been modelling revenues of CN¥54.3b and earnings per share (EPS) of CN¥0.50 in 2024. So the consensus seems to have become somewhat more optimistic on Zoomlion Heavy Industry Science and Technology's earnings potential following these results.

There's been no major changes to the consensus price target of CN¥8.91, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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. There are some variant perceptions on Zoomlion Heavy Industry Science and Technology, with the most bullish analyst valuing it at CN¥11.60 and the most bearish at CN¥7.30 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One thing stands out from these estimates, which is that Zoomlion Heavy Industry Science and Technology is forecast to grow faster in the future than it has in the past, with revenues expected to display 29% annualised growth until the end of 2024. If achieved, this would be a much better result than the 1.3% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 16% annually. So it looks like Zoomlion Heavy Industry Science and Technology is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Zoomlion Heavy Industry Science and Technology following these results. 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 held steady at CN¥8.91, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Zoomlion Heavy Industry Science and Technology going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 3 warning signs for Zoomlion Heavy Industry Science and Technology that you need to be mindful of.

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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.