Guangzhou Tinci Materials Technology Co., Ltd. Just Missed EPS By 57%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Guangzhou Tinci Materials Technology Co., Ltd. (SZSE:002709), given that the company fell short of expectations when it released its quarterly results last week. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥2.5b) coming in 30% below what they had expected. Statutory earnings per share of CN¥0.07 fell 57% short. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Guangzhou Tinci Materials Technology

Following the latest results, Guangzhou Tinci Materials Technology's 14 analysts are now forecasting revenues of CN¥15.3b in 2024. This would be a meaningful 13% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 14% to CN¥0.78. Before this earnings report, the analysts had been forecasting revenues of CN¥15.9b and earnings per share (EPS) of CN¥0.81 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the CN¥22.25 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Guangzhou Tinci Materials Technology, with the most bullish analyst valuing it at CN¥34.50 and the most bearish at CN¥10.00 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Guangzhou Tinci Materials Technology's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 41% over the past five years. Compare this to the 484 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 16% per year. Factoring in the forecast slowdown in growth, it looks like Guangzhou Tinci Materials Technology is forecast to grow at about the same rate as 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 Guangzhou Tinci Materials Technology. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Guangzhou Tinci Materials Technology 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 Guangzhou Tinci Materials Technology .

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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.