Canmax Technologies Co., Ltd. Recorded A 39% Miss On Revenue: Analysts Are Revisiting Their Models

Investors in Canmax Technologies Co., Ltd. (SZSE:300390) had a good week, as its shares rose 4.6% to close at CN¥19.99 following the release of its yearly results. Revenues were CN¥10b, 39% shy of what the analyst was expecting, although statutory earnings of CN¥1.99 per share were roughly in line with what was forecast. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Canmax Technologies

Taking into account the latest results, the current consensus, from the sole analyst covering Canmax Technologies, is for revenues of CN¥7.92b in 2024. This implies a concerning 24% reduction in Canmax Technologies' revenue over the past 12 months. Statutory earnings per share are forecast to nosedive 22% to CN¥1.56 in the same period. Yet prior to the latest earnings, the analyst had been anticipated revenues of CN¥9.60b and earnings per share (EPS) of CN¥1.16 in 2024. There's been a definite change in sentiment after these results, with the analyst delivering a a concerning to next year's revenue estimates, while at the same time substantially upgrading EPS. It's almost as though the business is anticipated to reduce its focus on growth to enhance profitability.

The consensus price target fell 6.1% to CN¥21.40, with the analyst signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 24% by the end of 2024. This indicates a significant reduction from annual growth of 59% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Canmax Technologies is expected to lag the wider industry.

The Bottom Line

The most important thing here is that the analyst upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Canmax Technologies following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings are more important to the intrinsic value of the business. Furthermore, the analyst also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

Even so, be aware that Canmax Technologies is showing 2 warning signs in our investment analysis , you should know about...

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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.