Earnings Miss: Konfoong Materials International Co., Ltd Missed EPS By 21% And Analysts Are Revising Their Forecasts

It's been a good week for Konfoong Materials International Co., Ltd (SZSE:300666) shareholders, because the company has just released its latest first-quarter results, and the shares gained 6.1% to CN¥50.70. Statutory earnings per share disappointed, coming in -21% short of expectations, at CN¥0.22. Fortunately revenue performance was a lot stronger at CN¥772m arriving 15% ahead of predictions. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Konfoong Materials International

Taking into account the latest results, the current consensus from Konfoong Materials International's three analysts is for revenues of CN¥3.36b in 2024. This would reflect a decent 11% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 37% to CN¥1.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.26b and earnings per share (EPS) of CN¥1.25 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.

It will come as no surprise to learn that the analysts have increased their price target for Konfoong Materials International 5.5% to CN¥57.25on the back of these upgrades. 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 Konfoong Materials International analyst has a price target of CN¥62.50 per share, while the most pessimistic values it at CN¥52.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Konfoong Materials International is an easy business to forecast or the the analysts are all using similar assumptions.

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. It's pretty clear that there is an expectation that Konfoong Materials International's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 22% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Konfoong Materials International.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Konfoong Materials International following these results. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Konfoong Materials International analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Konfoong Materials International 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.