Shandong Sinocera Functional Material Co., Ltd. Just Missed Revenue By 13%: Here's What Analysts Think Will Happen Next

As you might know, Shandong Sinocera Functional Material Co., Ltd. (SZSE:300285) last week released its latest first-quarter, and things did not turn out so great for shareholders. Shandong Sinocera Functional Material reported an earnings miss, with CN¥827m revenues falling 13% short of analyst models, and statutory earnings per share (EPS) of CN¥0.13 also coming in slightly below expectations. 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.

View our latest analysis for Shandong Sinocera Functional Material

Taking into account the latest results, the current consensus from Shandong Sinocera Functional Material's 19 analysts is for revenues of CN¥4.61b in 2024. This would reflect a notable 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 48% to CN¥0.86. Before this earnings report, the analysts had been forecasting revenues of CN¥4.59b and earnings per share (EPS) of CN¥0.89 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The average price target fell 8.5% to CN¥28.82, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values Shandong Sinocera Functional Material at CN¥41.00 per share, while the most bearish prices it at CN¥19.72. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 analysts are definitely expecting Shandong Sinocera Functional Material's growth to accelerate, with the forecast 25% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum 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 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shandong Sinocera Functional Material to grow faster than the wider industry.

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. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue 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 Shandong Sinocera Functional Material's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Shandong Sinocera Functional Material going out to 2026, and you can see them free on our platform here..

We also provide an overview of the Shandong Sinocera Functional Material Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.