Yonyou Network Technology Co.,Ltd. (SHSE:600588) Just Released Its First-Quarter Results And Analysts Are Updating Their Estimates

Investors in Yonyou Network Technology Co.,Ltd. (SHSE:600588) had a good week, as its shares rose 4.7% to close at CN¥11.64 following the release of its first-quarter results. Yonyou Network TechnologyLtd beat revenue forecasts by a solid 14%, hitting CN¥1.7b, but it also saw a corresponding increase in statutory losses, which hit CN¥0.14, some -20% greater than the analysts expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Yonyou Network TechnologyLtd after the latest results.

See our latest analysis for Yonyou Network TechnologyLtd

Taking into account the latest results, the consensus forecast from Yonyou Network TechnologyLtd's 25 analysts is for revenues of CN¥11.1b in 2024. This reflects a solid 10% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Yonyou Network TechnologyLtd forecast to report a statutory profit of CN¥0.094 per share. In the lead-up to this report, the analysts had been modelling revenues of CN¥11.1b and earnings per share (EPS) of CN¥0.082 in 2024. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at CN¥15.59, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Yonyou Network TechnologyLtd analyst has a price target of CN¥21.00 per share, while the most pessimistic values it at CN¥9.18. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Yonyou Network TechnologyLtd's growth to accelerate, with the forecast 14% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 22% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Yonyou Network TechnologyLtd is expected to grow slower than the wider industry.

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 Yonyou Network TechnologyLtd following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥15.59, 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. We have forecasts for Yonyou Network TechnologyLtd going out to 2026, and you can see them free on our platform here.

You can also see whether Yonyou Network TechnologyLtd is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.