EVE Energy Co., Ltd. Just Missed Revenue By 39%: Here's What Analysts Think Will Happen Next

EVE Energy Co., Ltd. (SZSE:300014) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. Earnings came in short of expectations, with revenues of CN¥9.3b missing the mark by 39%, and statutory earnings per share of CN¥0.52 falling 5.5% short. 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 EVE Energy after the latest results.

View our latest analysis for EVE Energy

After the latest results, the 19 analysts covering EVE Energy are now predicting revenues of CN¥56.9b in 2024. If met, this would reflect a huge 21% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 18% to CN¥2.29. Before this earnings report, the analysts had been forecasting revenues of CN¥63.9b and earnings per share (EPS) of CN¥2.66 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a substantial drop in earnings per share numbers as well.

The consensus price target fell 5.4% to CN¥47.02, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values EVE Energy at CN¥80.00 per share, while the most bearish prices it at CN¥20.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. It's pretty clear that there is an expectation that EVE Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 29% growth on an annualised basis. This is compared to a historical growth rate of 48% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% per year. So it's pretty clear that, while EVE Energy's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will 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.

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

It is also worth noting that we have found 2 warning signs for EVE Energy that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.