Gemdale Corporation (SHSE:600383) Released Earnings Last Week And Analysts Lifted Their Price Target To CN¥4.38

Shareholders might have noticed that Gemdale Corporation (SHSE:600383) filed its full-year result this time last week. The early response was not positive, with shares down 3.1% to CN¥4.62 in the past week. Despite revenues of CN¥75b falling 2.8% short of expectations, statutory losses of CN¥1.35 per share were well contained, and in line with analyst models. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Taking into account the latest results, the six analysts covering Gemdale provided consensus estimates of CN¥54.3b revenue in 2025, which would reflect a disturbing 28% decline over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 82% to CN¥0.24. Before this earnings announcement, the analysts had been modelling revenues of CN¥57.3b and losses of CN¥0.63 per share in 2025. Although the revenue estimates have fallen somewhat, Gemdale'sfuture looks a little different to the past, with a very promising decrease in the loss per share forecasts in particular.

Check out our latest analysis for Gemdale

The consensus price target rose 6.7% to CN¥4.38, with the analysts increasingly optimistic about shrinking losses, despite the expected decline in revenue. 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 Gemdale analyst has a price target of CN¥6.10 per share, while the most pessimistic values it at CN¥3.10. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Gemdale's past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 28% by the end of 2025. This indicates a significant reduction from annual growth of 7.1% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 0.5% annually for the foreseeable future. It's pretty clear that Gemdale's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. 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. Still, earnings per share are more important to value creation for shareholders. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Gemdale. Long-term earnings power is much more important than next year's profits. We have forecasts for Gemdale going out to 2027, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Gemdale that you should be aware of.

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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.