Earnings Miss: Oppein Home Group Inc. Missed EPS By 57% And Analysts Are Revising Their Forecasts

Oppein Home Group Inc. (SHSE:603833) just released its latest first-quarter report and things are not looking great. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥3.6b, statutory earnings missed forecasts by an incredible 57%, coming in at just CN¥0.36 per share. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Oppein Home Group

Taking into account the latest results, the consensus forecast from Oppein Home Group's 25 analysts is for revenues of CN¥24.1b in 2024. This reflects an okay 5.6% improvement in revenue compared to the last 12 months. Statutory per-share earnings are expected to be CN¥5.21, roughly flat on the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of CN¥26.0b and earnings per share (EPS) of CN¥5.68 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to CN¥87.09. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Oppein Home Group, with the most bullish analyst valuing it at CN¥142 and the most bearish at CN¥53.40 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. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Oppein Home Group's revenue growth is expected to slow, with the forecast 7.5% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.3% annually. Factoring in the forecast slowdown in growth, it seems obvious that Oppein Home Group is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Oppein Home Group analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Oppein Home Group 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.