Joyoung Co.,Ltd Just Missed Earnings - But Analysts Have Updated Their Models

Joyoung Co.,Ltd (SZSE:002242) missed earnings with its latest annual results, disappointing overly-optimistic forecasters. Results showed a clear earnings miss, with CN¥9.6b revenue coming in 7.5% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.52 missed the mark badly, arriving some 29% 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 JoyoungLtd

After the latest results, the 15 analysts covering JoyoungLtd are now predicting revenues of CN¥10.4b in 2024. If met, this would reflect a notable 8.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 61% to CN¥0.82. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥11.4b and earnings per share (EPS) of CN¥0.86 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.

The consensus price target fell 5.8% to CN¥13.38, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic JoyoungLtd analyst has a price target of CN¥17.70 per share, while the most pessimistic values it at CN¥9.70. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that JoyoungLtd's rate of growth is expected to accelerate meaningfully, with the forecast 8.6% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 10.0% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that JoyoungLtd is expected to grow at about the same rate as 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 JoyoungLtd. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of JoyoungLtd's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for JoyoungLtd 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.