Revenue Miss: JA Solar Technology Co., Ltd. Fell 7.6% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

As you might know, JA Solar Technology Co., Ltd. (SZSE:002459) recently reported its quarterly numbers. Revenues came in 7.6% below expectations, at CN¥16b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥2.10 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for JA Solar Technology

Following the latest results, JA Solar Technology's 18 analysts are now forecasting revenues of CN¥93.1b in 2024. This would be a sizeable 21% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 113% to CN¥2.57. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥98.1b and earnings per share (EPS) of CN¥2.66 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The consensus price target fell 5.2% to CN¥26.27, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic JA Solar Technology analyst has a price target of CN¥51.66 per share, while the most pessimistic values it at CN¥12.90. 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.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 29% growth on an annualised basis. That is in line with its 34% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 23% per year. So although JA Solar Technology is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of JA Solar Technology's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for JA Solar Technology 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 3 warning signs for JA Solar Technology (1 is significant) 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.