Revenue Miss: Shanghai Bairun Investment Holding Group Co., Ltd. Fell 10% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

It's been a good week for Shanghai Bairun Investment Holding Group Co., Ltd. (SZSE:002568) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.7% to CN¥19.95. Revenues were CN¥802m, 10% below analyst expectations, although losses didn't appear to worsen significantly, with a per-share statutory loss of CN¥0.78 being in line with what the analysts forecast. 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 Shanghai Bairun Investment Holding Group

Following the latest results, Shanghai Bairun Investment Holding Group's eleven analysts are now forecasting revenues of CN¥3.74b in 2024. This would be a notable 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 16% to CN¥0.88. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥4.21b and earnings per share (EPS) of CN¥1.05 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shanghai Bairun Investment Holding Group's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.

Despite the cuts to forecast earnings, there was no real change to the CN¥28.69 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Shanghai Bairun Investment Holding Group at CN¥38.57 per share, while the most bearish prices it at CN¥20.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanghai Bairun Investment Holding Group's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 18% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 13% annually. So although Shanghai Bairun Investment Holding Group is expected to maintain its revenue growth rate, it's definitely expected 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 Shanghai Bairun Investment Holding Group. They also downgraded Shanghai Bairun Investment Holding Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at CN¥28.69, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Shanghai Bairun Investment Holding Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shanghai Bairun Investment Holding Group analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with Shanghai Bairun Investment Holding Group (including 1 which is a bit concerning) .

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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.