Kingnet Network Co., Ltd. Just Missed EPS By 10%: Here's What Analysts Think Will Happen Next

It's been a good week for Kingnet Network Co., Ltd. (SZSE:002517) shareholders, because the company has just released its latest first-quarter results, and the shares gained 7.4% to CN¥11.79. Revenues were in line with forecasts, at CN¥1.3b, although statutory earnings per share came in 10% below what the analysts expected, at CN¥0.20 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Kingnet Network

Taking into account the latest results, the current consensus from Kingnet Network's twelve analysts is for revenues of CN¥5.42b in 2024. This would reflect a decent 17% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to step up 12% to CN¥0.84. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.61b and earnings per share (EPS) of CN¥0.85 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The consensus has reconfirmed its price target of CN¥16.79, showing that the analysts don't expect weaker revenue expectations next year to have a material impact on Kingnet Network's market 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. The most optimistic Kingnet Network analyst has a price target of CN¥20.00 per share, while the most pessimistic values it at CN¥14.50. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Kingnet Network shareholders.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Kingnet Network'shistorical trends, as the 23% annualised revenue growth to the end of 2024 is roughly in line with the 20% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 17% per year. So although Kingnet Network is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also downgraded Kingnet Network's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at CN¥16.79, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Kingnet Network. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Kingnet Network analysts - 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 Kingnet Network 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.