Stock Analysis

Earnings Miss: Chongqing Zhifei Biological Products Co., Ltd. Missed EPS By 35% And Analysts Are Revising Their Forecasts

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Chongqing Zhifei Biological Products Co., Ltd. (SZSE:300122) missed earnings with its latest first-quarter results, disappointing overly-optimistic forecasters. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥11b, statutory earnings missed forecasts by an incredible 35%, coming in at just CN¥0.61 per share. 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.

See our latest analysis for Chongqing Zhifei Biological Products

SZSE:300122 Earnings and Revenue Growth April 26th 2024

After the latest results, the 14 analysts covering Chongqing Zhifei Biological Products are now predicting revenues of CN¥56.9b in 2024. If met, this would reflect a satisfactory 7.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 42% to CN¥4.46. Before this earnings report, the analysts had been forecasting revenues of CN¥59.7b and earnings per share (EPS) of CN¥4.66 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a small dip in earnings per share estimates.

The consensus price target fell 12% to CN¥62.47, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Chongqing Zhifei Biological Products analyst has a price target of CN¥95.88 per share, while the most pessimistic values it at CN¥38.10. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Chongqing Zhifei Biological Products' revenue growth is expected to slow, with the forecast 9.6% annualised growth rate until the end of 2024 being well below the historical 38% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 22% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Chongqing Zhifei Biological Products.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Chongqing Zhifei Biological Products. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Chongqing Zhifei Biological Products' future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Chongqing Zhifei Biological Products. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Chongqing Zhifei Biological Products going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Chongqing Zhifei Biological Products .

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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.