Sunwoda Electronic Co.,Ltd Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Sunwoda Electronic Co.,Ltd (SZSE:300207) last week released its latest annual, and things did not turn out so great for shareholders. Results look to have been somewhat negative - revenue fell 3.4% short of analyst estimates at CN¥48b, and statutory earnings of CN¥0.58 per share missed forecasts by 5.3%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Sunwoda ElectronicLtd

After the latest results, the eight analysts covering Sunwoda ElectronicLtd are now predicting revenues of CN¥58.9b in 2024. If met, this would reflect a major 23% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 26% to CN¥0.73. Before this earnings report, the analysts had been forecasting revenues of CN¥59.0b and earnings per share (EPS) of CN¥0.82 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥20.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Sunwoda ElectronicLtd, with the most bullish analyst valuing it at CN¥26.00 and the most bearish at CN¥14.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 23% growth on an annualised basis. That is in line with its 20% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 18% per year. So although Sunwoda ElectronicLtd is expected to maintain its revenue growth rate, it's definitely expected to grow faster than 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 Sunwoda ElectronicLtd. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Sunwoda ElectronicLtd. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Sunwoda ElectronicLtd 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 1 warning sign for Sunwoda ElectronicLtd 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.