37 Interactive Entertainment Network Technology Group Co., Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

It's shaping up to be a tough period for 37 Interactive Entertainment Network Technology Group Co., Ltd. (SZSE:002555), which a week ago released some disappointing half-yearly results that could have a notable impact on how the market views the stock. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥9.2b, statutory earnings missed forecasts by 17%, coming in at just CN¥0.29 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on 37 Interactive Entertainment Network Technology Group after the latest results.

Check out our latest analysis for 37 Interactive Entertainment Network Technology Group

Following the latest results, 37 Interactive Entertainment Network Technology Group's 15 analysts are now forecasting revenues of CN¥18.7b in 2024. This would be a credible 3.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to increase 4.2% to CN¥1.28. Before this earnings report, the analysts had been forecasting revenues of CN¥19.2b and earnings per share (EPS) of CN¥1.52 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a substantial drop in earnings per share numbers.

The consensus price target fell 5.1% to CN¥22.20, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on 37 Interactive Entertainment Network Technology Group, with the most bullish analyst valuing it at CN¥33.00 and the most bearish at CN¥12.00 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.

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 period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 8.0% growth on an annualised basis. That is in line with its 7.0% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 14% annually. So it's pretty clear that 37 Interactive Entertainment Network Technology Group is expected to grow slower than similar companies in the same 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. 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 37 Interactive Entertainment Network Technology Group's future valuation.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple 37 Interactive Entertainment Network Technology Group analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 2 warning signs for 37 Interactive Entertainment Network Technology Group you should be aware of, and 1 of them is significant.

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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.