Moon Environment Technology Co.,Ltd. Recorded A 7.6% Miss On Revenue: Analysts Are Revisiting Their Models

The analysts might have been a bit too bullish on Moon Environment Technology Co.,Ltd. (SZSE:000811), given that the company fell short of expectations when it released its yearly results last week. Moon Environment TechnologyLtd missed analyst forecasts, with revenues of CN¥7.5b and statutory earnings per share (EPS) of CN¥0.88, falling short by 7.6% and 5.4% respectively. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Moon Environment TechnologyLtd after the latest results.

Check out our latest analysis for Moon Environment TechnologyLtd

Following the latest results, Moon Environment TechnologyLtd's three analysts are now forecasting revenues of CN¥8.24b in 2024. This would be a decent 10.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 16% to CN¥0.99. Before this earnings report, the analysts had been forecasting revenues of CN¥10.1b and earnings per share (EPS) of CN¥1.14 in 2024. Indeed, we can see that the analysts are a lot more bearish about Moon Environment TechnologyLtd's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 20% to CN¥14.56. 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. There are some variant perceptions on Moon Environment TechnologyLtd, with the most bullish analyst valuing it at CN¥15.00 and the most bearish at CN¥14.11 per share. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Moon Environment TechnologyLtd is an easy business to forecast or the the analysts are all using similar assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Moon Environment TechnologyLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 10.0% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 19% annually. Factoring in the forecast slowdown in growth, it seems obvious that Moon Environment TechnologyLtd is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse 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.

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. We have forecasts for Moon Environment TechnologyLtd going out to 2025, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for Moon Environment TechnologyLtd you should be aware 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.