Sichuan Swellfun Co.,Ltd Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next
Sichuan Swellfun Co.,Ltd (SHSE:600779) just released its latest quarterly results and things are looking bullish. The company beat forecasts, with revenue of CN„785m, some 4.1% above estimates, and statutory earnings per share (EPS) coming in at CN„0.12, 91% ahead of expectations. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Sichuan SwellfunLtd
Taking into account the latest results, the consensus forecast from Sichuan SwellfunLtd's twelve analysts is for revenues of CN„5.29b in 2024. This reflects a credible 2.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 3.8% to CN„2.79. In the lead-up to this report, the analysts had been modelling revenues of CN„5.40b and earnings per share (EPS) of CN„2.88 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 13% to CN„47.31. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Sichuan SwellfunLtd analyst has a price target of CN„66.00 per share, while the most pessimistic values it at CN„31.27. 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. It's pretty clear that there is an expectation that Sichuan SwellfunLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Sichuan SwellfunLtd.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sichuan SwellfunLtd. 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 Sichuan SwellfunLtd analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 2 warning signs for Sichuan SwellfunLtd (of which 1 is concerning!) you should know about.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
About SHSE:600779
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