Results: Ecovacs Robotics Co., Ltd. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a pretty great week for Ecovacs Robotics Co., Ltd. (SHSE:603486) shareholders, with its shares surging 11% to CN¥42.00 in the week since its latest quarterly results. The results were mixed; although revenues of CN¥3.5b fell 10% short of analyst estimates, statutory earnings per share (EPS) of CN¥0.54 beat expectations by 13%. 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've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Ecovacs Robotics

After the latest results, the 18 analysts covering Ecovacs Robotics are now predicting revenues of CN¥16.7b in 2024. If met, this would reflect a decent 9.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 108% to CN¥2.31. Before this earnings report, the analysts had been forecasting revenues of CN¥17.6b and earnings per share (EPS) of CN¥2.22 in 2024. So it's pretty clear that while sentiment around revenues has declined following the latest results, the analysts are now more bullish on the company's earnings power.

There's been no real change to the average price target of CN¥48.65, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Ecovacs Robotics analyst has a price target of CN¥61.50 per share, while the most pessimistic values it at CN¥37.80. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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 would highlight that Ecovacs Robotics' revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2024 being well below the historical 24% 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 8.4% annually. So it's pretty clear that, while Ecovacs Robotics' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Ecovacs Robotics following these results. They also downgraded Ecovacs Robotics' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CN¥48.65, with the latest estimates not enough to have an impact on their price targets.

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

Even so, be aware that Ecovacs Robotics is showing 1 warning sign in our investment analysis , you should know about...

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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.