Dongguan Yiheda Automation Co., Ltd Just Missed EPS By 6.8%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Dongguan Yiheda Automation Co., Ltd (SZSE:301029), given that the company fell short of expectations when it released its yearly results last week. Results look to have been somewhat negative - revenue fell 2.1% short of analyst estimates at CN¥2.9b, and statutory earnings of CN¥0.95 per share missed forecasts by 6.8%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Dongguan Yiheda Automation

Taking into account the latest results, the consensus forecast from Dongguan Yiheda Automation's eleven analysts is for revenues of CN¥2.96b in 2024. This reflects a reasonable 2.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to step up 17% to CN¥1.11. Before this earnings report, the analysts had been forecasting revenues of CN¥3.55b and earnings per share (EPS) of CN¥1.32 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a real cut to earnings per share numbers as well.

The consensus price target fell 8.0% to CN¥28.21, with the weaker earnings outlook clearly leading valuation estimates. 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. Currently, the most bullish analyst values Dongguan Yiheda Automation at CN¥34.20 per share, while the most bearish prices it at CN¥16.80. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Dongguan Yiheda Automation's past performance and to peers in the same industry. We would highlight that Dongguan Yiheda Automation's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 27% 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 17% per year. Factoring in the forecast slowdown in growth, it seems obvious that Dongguan Yiheda Automation is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Dongguan Yiheda Automation. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Dongguan Yiheda Automation analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Dongguan Yiheda Automation (1 makes us a bit uncomfortable) 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.