B-SOFT Co.,Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on B-SOFT Co.,Ltd. (SZSE:300451), given that the company fell short of expectations when it released its yearly results last week. Results showed a clear earnings miss, with CN¥1.6b revenue coming in 8.3% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.02 missed the mark badly, arriving some 90% below what was expected. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for B-SOFTLtd

After the latest results, the four analysts covering B-SOFTLtd are now predicting revenues of CN¥1.86b in 2024. If met, this would reflect a notable 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 616% to CN¥0.17. Before this earnings report, the analysts had been forecasting revenues of CN¥2.16b and earnings per share (EPS) of CN¥0.29 in 2024. Indeed, we can see that the analysts are a lot more bearish about B-SOFTLtd's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to CN¥8.49. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values B-SOFTLtd at CN¥10.00 per share, while the most bearish prices it at CN¥5.46. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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 clear from the latest estimates that B-SOFTLtd's rate of growth is expected to accelerate meaningfully, with the forecast 15% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 3.3% 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 19% per year. So it's clear that despite the acceleration in growth, B-SOFTLtd is expected to grow meaningfully slower than the industry average.

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 B-SOFTLtd's future valuation.

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 B-SOFTLtd analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for B-SOFTLtd you should be aware 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.