INKON Life Technology Co., Ltd. Just Missed EPS By 16%: Here's What Analysts Think Will Happen Next

Investors in INKON Life Technology Co., Ltd. (SZSE:300143) had a good week, as its shares rose 6.6% to close at CN¥7.75 following the release of its full-year results. It was not a great result overall. While revenues of CN¥1.5b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 16% to hit CN¥0.16 per share. The analyst 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 analyst latest (statutory) post-earnings forecasts for next year.

See our latest analysis for INKON Life Technology

Taking into account the latest results, the current consensus from INKON Life Technology's sole analyst is for revenues of CN¥1.77b in 2024. This would reflect a huge 20% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 40% to CN¥0.22. In the lead-up to this report, the analyst had been modelling revenues of CN¥1.83b and earnings per share (EPS) of CN¥0.28 in 2024. The analyst seem less optimistic after the recent results, reducing their revenue forecasts and making a large cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analyst has cut their price target 18% to CN¥10.12.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analyst, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 21% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 15% per year. So it's pretty clear that INKON Life Technology is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that the analyst downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded INKON Life Technology's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of INKON Life Technology's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

You can also see our analysis of INKON Life Technology's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.