Shenzhen Fuanna Bedding and Furnishing Co.,Ltd Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Shenzhen Fuanna Bedding and Furnishing Co.,Ltd (SZSE:002327) shareholders are probably feeling a little disappointed, since its shares fell 7.3% to CN¥6.99 in the week after its latest second-quarter results. Revenues came in 7.5% below expectations, at CN¥656m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.69 being roughly in line with analyst estimates. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Shenzhen Fuanna Bedding and FurnishingLtd

Taking into account the latest results, Shenzhen Fuanna Bedding and FurnishingLtd's eight analysts currently expect revenues in 2024 to be CN¥3.08b, approximately in line with the last 12 months. Statutory per share are forecast to be CN¥0.69, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.27b and earnings per share (EPS) of CN¥0.76 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a substantial drop in earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the CN¥10.53 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. Currently, the most bullish analyst values Shenzhen Fuanna Bedding and FurnishingLtd at CN¥12.93 per share, while the most bearish prices it at CN¥10.95. This is a very narrow spread of estimates, implying either that Shenzhen Fuanna Bedding and FurnishingLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 Shenzhen Fuanna Bedding and FurnishingLtd's revenue growth is expected to slow, with the forecast 0.9% annualised growth rate until the end of 2024 being well below the historical 2.0% 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 13% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Shenzhen Fuanna Bedding and FurnishingLtd.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shenzhen Fuanna Bedding and FurnishingLtd. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Shenzhen Fuanna Bedding and FurnishingLtd going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Shenzhen Fuanna Bedding and FurnishingLtd that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.