Wuxi Paike New Materials Technology Co.,Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Last week, you might have seen that Wuxi Paike New Materials Technology Co.,Ltd. (SHSE:605123) released its quarterly result to the market. The early response was not positive, with shares down 8.0% to CN¥64.57 in the past week. Wuxi Paike New Materials TechnologyLtd reported a serious miss, with revenue of CN¥749m falling a huge 26% short of analyst estimates. The bright side is that statutory earnings per share of CN¥4.06 were in line with forecasts. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wuxi Paike New Materials TechnologyLtd after the latest results.

Check out our latest analysis for Wuxi Paike New Materials TechnologyLtd

Taking into account the latest results, the most recent consensus for Wuxi Paike New Materials TechnologyLtd from four analysts is for revenues of CN¥4.29b in 2024. If met, it would imply a substantial 25% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 37% to CN¥4.76. Before this earnings report, the analysts had been forecasting revenues of CN¥4.56b and earnings per share (EPS) of CN¥5.98 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a pretty serious reduction to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 43% to CN¥92.63. 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. There are some variant perceptions on Wuxi Paike New Materials TechnologyLtd, with the most bullish analyst valuing it at CN¥98.60 and the most bearish at CN¥86.65 per share. This is a very narrow spread of estimates, implying either that Wuxi Paike New Materials TechnologyLtd is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Wuxi Paike New Materials TechnologyLtd'shistorical trends, as the 35% annualised revenue growth to the end of 2024 is roughly in line with the 36% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 11% annually. So it's pretty clear that Wuxi Paike New Materials TechnologyLtd is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Wuxi Paike New Materials TechnologyLtd. They also downgraded Wuxi Paike New Materials TechnologyLtd'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 analysts seemingly not reassured by the latest results, leading to a lower estimate of Wuxi Paike New Materials TechnologyLtd's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Wuxi Paike New Materials TechnologyLtd. Long-term earnings power is much more important than next year's profits. We have forecasts for Wuxi Paike New Materials TechnologyLtd going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Wuxi Paike New Materials TechnologyLtd that 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.