SICC Co., Ltd. Just Recorded A 66% EPS Beat: Here's What Analysts Are Forecasting Next

SICC Co., Ltd. (SHSE:688234) shareholders are probably feeling a little disappointed, since its shares fell 3.9% to CN¥47.25 in the week after its latest second-quarter results. Revenues were CN¥486m, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at CN¥0.13, an impressive 66% ahead of estimates. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SICC after the latest results.

View our latest analysis for SICC

Taking into account the latest results, the most recent consensus for SICC from ten analysts is for revenues of CN¥2.26b in 2024. If met, it would imply a substantial 31% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 41% to CN¥0.42. Before this earnings report, the analysts had been forecasting revenues of CN¥2.14b and earnings per share (EPS) of CN¥0.41 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥65.00, suggesting that the forecast performance does not have a long term impact on the company's 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. The most optimistic SICC analyst has a price target of CN¥95.00 per share, while the most pessimistic values it at CN¥39.00. 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 SICC's past performance and to peers in the same industry. It's pretty clear that there is an expectation that SICC's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 72% growth on an annualised basis. This is compared to a historical growth rate of 148% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 22% annually. So it's pretty clear that, while SICC's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around SICC's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. 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.

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. We have estimates - from multiple SICC analysts - 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 SICC 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.