G-bits Network Technology (Xiamen) Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

It's shaping up to be a tough period for G-bits Network Technology (Xiamen) Co., Ltd. (SHSE:603444), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 7.6% short of analyst estimates at CN¥4.2b, and statutory earnings of CN¥15.63 per share missed forecasts by 6.2%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on G-bits Network Technology (Xiamen) after the latest results.

See our latest analysis for G-bits Network Technology (Xiamen)

Following the latest results, G-bits Network Technology (Xiamen)'s 14 analysts are now forecasting revenues of CN¥4.51b in 2024. This would be a credible 7.8% improvement in revenue compared to the last 12 months. Per-share earnings are expected to accumulate 3.1% to CN¥16.11. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.10b and earnings per share (EPS) of CN¥20.33 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a real cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

The consensus price target fell 11% to CN¥299, with the weaker earnings outlook clearly leading valuation estimates. 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 G-bits Network Technology (Xiamen), with the most bullish analyst valuing it at CN¥400 and the most bearish at CN¥210 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that G-bits Network Technology (Xiamen)'s revenue growth is expected to slow, with the forecast 7.8% annualised growth rate until the end of 2024 being well below the historical 22% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 17% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than G-bits Network Technology (Xiamen).

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 G-bits Network Technology (Xiamen)'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 G-bits Network Technology (Xiamen) going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for G-bits Network Technology (Xiamen) that we have uncovered.

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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.