LONGi Green Energy Technology Co., Ltd. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

The first-quarter results for LONGi Green Energy Technology Co., Ltd. (SHSE:601012) were released last week, making it a good time to revisit its performance. It was a pretty bad result overall, with revenues coming in 30% lower than the analysts predicted. Unsurprisingly, the statutory profit the analysts had been forecasting evaporated, turning into a loss of CN¥0.31 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on LONGi Green Energy Technology after the latest results.

See our latest analysis for LONGi Green Energy Technology

Taking into account the latest results, the current consensus, from the 25 analysts covering LONGi Green Energy Technology, is for revenues of CN¥109.9b in 2024. This implies a definite 15% reduction in LONGi Green Energy Technology's revenue over the past 12 months. Statutory earnings per share are forecast to nosedive 43% to CN¥0.81 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥135.7b and earnings per share (EPS) of CN¥1.74 in 2024. Indeed, we can see that the analysts are a lot more bearish about LONGi Green Energy Technology's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.

Despite the cuts to forecast earnings, there was no real change to the CN¥25.26 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic 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 LONGi Green Energy Technology analyst has a price target of CN¥57.40 per share, while the most pessimistic values it at CN¥11.10. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 20% annualised decline to the end of 2024. That is a notable change from historical growth of 37% 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 23% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - LONGi Green Energy Technology is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for LONGi Green Energy Technology. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on LONGi Green Energy Technology. Long-term earnings power is much more important than next year's profits. We have forecasts for LONGi Green Energy Technology going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with LONGi Green Energy Technology (including 1 which doesn't sit too well with us) .

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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.