Hangzhou Robam Appliances Co., Ltd. Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next

As you might know, Hangzhou Robam Appliances Co., Ltd. (SZSE:002508) last week released its latest interim, and things did not turn out so great for shareholders. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥4.7b, statutory earnings missed forecasts by 19%, coming in at just CN¥0.38 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Hangzhou Robam Appliances

Taking into account the latest results, the most recent consensus for Hangzhou Robam Appliances from 21 analysts is for revenues of CN¥11.3b in 2024. If met, it would imply an okay 2.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 6.2% to CN¥1.88. In the lead-up to this report, the analysts had been modelling revenues of CN¥11.9b and earnings per share (EPS) of CN¥2.02 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 12% to CN¥23.43, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hangzhou Robam Appliances, with the most bullish analyst valuing it at CN¥31.36 and the most bearish at CN¥18.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Hangzhou Robam Appliances shareholders.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Hangzhou Robam Appliances' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.1% growth on an annualised basis. This is compared to a historical growth rate of 9.3% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.3% 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 Hangzhou Robam Appliances.

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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hangzhou Robam Appliances' 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 Hangzhou Robam Appliances going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Hangzhou Robam Appliances that we have uncovered.

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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.