Sino Wealth Electronic Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

As you might know, Sino Wealth Electronic Ltd. (SZSE:300327) last week released its latest second-quarter, and things did not turn out so great for shareholders. Unfortunately, Sino Wealth Electronic delivered a serious earnings miss. Revenues of CN¥335m were 13% below expectations, and statutory earnings per share of CN¥0.12 missed estimates by 25%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sino Wealth Electronic after the latest results.

Check out our latest analysis for Sino Wealth Electronic

Taking into account the latest results, the consensus forecast from Sino Wealth Electronic's six analysts is for revenues of CN¥1.38b in 2024. This reflects an okay 3.8% improvement in revenue compared to the last 12 months. Statutory earnings per share are forecast to fall 11% to CN¥0.45 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.58b and earnings per share (EPS) of CN¥0.61 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sino Wealth Electronic's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥23.40, suggesting the downgrades are not expected to have a long-term impact on Sino Wealth Electronic's valuation. 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. Currently, the most bullish analyst values Sino Wealth Electronic at CN¥27.00 per share, while the most bearish prices it at CN¥19.40. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Sino Wealth Electronic's revenue growth is expected to slow, with the forecast 7.7% annualised growth rate until the end of 2024 being well below the historical 11% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 22% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sino Wealth Electronic is also expected to grow slower than other industry participants.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at CN¥23.40, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Sino Wealth Electronic going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Sino Wealth Electronic , and understanding them should be part of your investment process.

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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.