Joyoung Co.,Ltd Just Missed EPS By 66%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Joyoung Co.,Ltd (SZSE:002242), given that the company fell short of expectations when it released its second-quarter results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥2.3b, statutory earnings missed forecasts by an incredible 66%, coming in at just CN¥0.06 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for JoyoungLtd

Following last week's earnings report, JoyoungLtd's ten analysts are forecasting 2024 revenues to be CN¥9.61b, approximately in line with the last 12 months. Per-share earnings are expected to expand 13% to CN¥0.47. Before this earnings report, the analysts had been forecasting revenues of CN¥10.2b and earnings per share (EPS) of CN¥0.64 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

Despite the cuts to forecast earnings, there was no real change to the CN¥12.13 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values JoyoungLtd at CN¥17.00 per share, while the most bearish prices it at CN¥8.25. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.4% by the end of 2024. This indicates a significant reduction from annual growth of 0.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.4% annually for the foreseeable future. It's pretty clear that JoyoungLtd's revenues are expected to perform substantially worse than 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥12.13, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for JoyoungLtd going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with JoyoungLtd , and understanding this should be part of your investment process.

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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.