Wuxi Lead Intelligent Equipment CO.,LTD. Recorded A 14% Miss On Revenue: Analysts Are Revisiting Their Models

The analysts might have been a bit too bullish on Wuxi Lead Intelligent Equipment CO.,LTD. (SZSE:300450), given that the company fell short of expectations when it released its quarterly results last week. Wuxi Lead Intelligent EquipmentLTD reported an earnings miss, with CN¥3.3b revenues falling 14% short of analyst models, and statutory earnings per share (EPS) of CN¥0.36 also coming in slightly below expectations. 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 Wuxi Lead Intelligent EquipmentLTD

After the latest results, the 15 analysts covering Wuxi Lead Intelligent EquipmentLTD are now predicting revenues of CN¥18.3b in 2024. If met, this would reflect a meaningful 9.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 94% to CN¥2.21. In the lead-up to this report, the analysts had been modelling revenues of CN¥22.9b and earnings per share (EPS) of CN¥2.60 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a pretty serious reduction to revenue estimates and a substantial drop in earnings per share numbers as well.

The consensus price target fell 6.2% to CN¥32.86, 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. There are some variant perceptions on Wuxi Lead Intelligent EquipmentLTD, with the most bullish analyst valuing it at CN¥59.00 and the most bearish at CN¥16.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. 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.

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. We would highlight that Wuxi Lead Intelligent EquipmentLTD's revenue growth is expected to slow, with the forecast 13% annualised growth rate until the end of 2024 being well below the historical 32% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Wuxi Lead Intelligent EquipmentLTD.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Wuxi Lead Intelligent EquipmentLTD. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Wuxi Lead Intelligent EquipmentLTD's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Wuxi Lead Intelligent EquipmentLTD. 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 Wuxi Lead Intelligent EquipmentLTD going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 3 warning signs for Wuxi Lead Intelligent EquipmentLTD (1 makes us a bit uncomfortable!) that we have uncovered.

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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.