Piotech Inc. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Investors in Piotech Inc. (SHSE:688072) had a good week, as its shares rose 4.5% to close at CN¥125 following the release of its quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥795m, statutory earnings were in line with expectations, at CN¥2.40 per share. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Piotech

Taking into account the latest results, the most recent consensus for Piotech from eight analysts is for revenues of CN¥3.96b in 2024. If met, it would imply a major 33% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to ascend 18% to CN¥2.85. Before this earnings report, the analysts had been forecasting revenues of CN¥4.01b and earnings per share (EPS) of CN¥3.18 in 2024. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥201, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. There are some variant perceptions on Piotech, with the most bullish analyst valuing it at CN¥262 and the most bearish at CN¥145 per share. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

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 Piotech's rate of growth is expected to accelerate meaningfully, with the forecast 78% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 36% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Piotech is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Piotech. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CN¥201, with the latest estimates not enough to have an impact on their price targets.

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. At Simply Wall St, we have a full range of analyst estimates for Piotech going out to 2026, 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 Piotech 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.