Earnings Miss: Here's What Sanquan Food Co., Ltd. (SZSE:002216) Analysts Are Forecasting For This Year

It's shaping up to be a tough period for Sanquan Food Co., Ltd. (SZSE:002216), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Sanquan Food missed earnings this time around, with CN¥2.3b revenue coming in 9.1% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥0.26 also fell short of expectations by 10%. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Sanquan Food

Following the latest results, Sanquan Food's nine analysts are now forecasting revenues of CN¥7.91b in 2024. This would be a meaningful 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 22% to CN¥0.97. Before this earnings report, the analysts had been forecasting revenues of CN¥8.14b and earnings per share (EPS) of CN¥1.02 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.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.5% to CN¥15.83. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Sanquan Food at CN¥19.00 per share, while the most bearish prices it at CN¥11.90. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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 Sanquan Food's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 5.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Sanquan Food to grow faster 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 Sanquan Food. They also downgraded Sanquan Food's revenue estimates, but industry data suggests that it is expected to grow faster 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 forecasts for Sanquan Food going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Sanquan Food that you need to be mindful of.

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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.