CN¥40.58: That's What Analysts Think Zhejiang Jingsheng Mechanical & Electrical Co., Ltd. (SZSE:300316) Is Worth After Its Latest Results

Zhejiang Jingsheng Mechanical & Electrical Co., Ltd. (SZSE:300316) just released its latest annual report and things are not looking great. Results look to have been somewhat negative - revenue fell 2.7% short of analyst estimates at CN¥18b, and statutory earnings of CN¥3.49 per share missed forecasts by 4.4%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Zhejiang Jingsheng Mechanical & Electrical

Taking into account the latest results, the most recent consensus for Zhejiang Jingsheng Mechanical & Electrical from nine analysts is for revenues of CN¥22.3b in 2024. If met, it would imply a huge 24% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 21% to CN¥4.21. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥22.3b and earnings per share (EPS) of CN¥4.35 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The average price target fell 9.6% to CN¥40.58, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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 Zhejiang Jingsheng Mechanical & Electrical, with the most bullish analyst valuing it at CN¥54.00 and the most bearish at CN¥33.50 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Zhejiang Jingsheng Mechanical & Electrical shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Zhejiang Jingsheng Mechanical & Electrical's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 42% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 23% annually. Factoring in the forecast slowdown in growth, it looks like Zhejiang Jingsheng Mechanical & Electrical is forecast to grow at about the same rate as 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 Zhejiang Jingsheng Mechanical & Electrical. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 forecasts for Zhejiang Jingsheng Mechanical & Electrical 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 2 warning signs for Zhejiang Jingsheng Mechanical & Electrical (1 is potentially serious) 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.