Rockchip Electronics Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's shaping up to be a tough period for Rockchip Electronics Co., Ltd. (SHSE:603893), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with CN¥2.1b revenue coming in 3.8% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.32 missed the mark badly, arriving some 23% below what was expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Rockchip Electronics

Taking into account the latest results, the current consensus from Rockchip Electronics' six analysts is for revenues of CN¥2.87b in 2024. This would reflect a substantial 34% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 146% to CN¥0.80. Before this earnings report, the analysts had been forecasting revenues of CN¥2.86b and earnings per share (EPS) of CN¥1.00 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

The consensus price target held steady at CN¥70.25, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Rockchip Electronics at CN¥72.50 per share, while the most bearish prices it at CN¥68.00. This is a very narrow spread of estimates, implying either that Rockchip Electronics is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Rockchip Electronics' rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.8% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Rockchip Electronics to grow faster than 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 Rockchip Electronics. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CN¥70.25, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Rockchip Electronics going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Rockchip Electronics 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.