Centre Testing International Group Co. Ltd. Just Missed EPS By 25%: Here's What Analysts Think Will Happen Next

It's shaping up to be a tough period for Centre Testing International Group Co. Ltd. (SZSE:300012), which a week ago released some disappointing first-quarter results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with CN¥1.2b revenue coming in 4.7% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.079 missed the mark badly, arriving some 25% below what was expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Centre Testing International Group

Taking into account the latest results, the current consensus from Centre Testing International Group's 14 analysts is for revenues of CN¥6.38b in 2024. This would reflect a decent 12% increase on its revenue over the past 12 months. Per-share earnings are expected to ascend 17% to CN¥0.63. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.49b and earnings per share (EPS) of CN¥0.64 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥15.98, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Centre Testing International Group, with the most bullish analyst valuing it at CN¥23.50 and the most bearish at CN¥11.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. We can infer from the latest estimates that forecasts expect a continuation of Centre Testing International Group'shistorical trends, as the 17% annualised revenue growth to the end of 2024 is roughly in line with the 15% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 18% per year. So although Centre Testing International Group is expected to maintain its revenue growth rate, it's only growing at about the rate of 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 Centre Testing International Group. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as 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 Centre Testing International Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Centre Testing International Group analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.