Weaver Network Technology Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders might have noticed that Weaver Network Technology Co., Ltd. (SHSE:603039) filed its full-year result this time last week. The early response was not positive, with shares down 3.5% to CN¥63.50 in the past week. Revenues of CN¥2.4b were in line with forecasts, although statutory earnings per share (EPS) came in below expectations at CN¥0.78, missing estimates by 6.0%. 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 Weaver Network Technology after the latest results.

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After the latest results, the four analysts covering Weaver Network Technology are now predicting revenues of CN¥2.58b in 2025. If met, this would reflect a decent 9.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 25% to CN¥0.99. Before this earnings report, the analysts had been forecasting revenues of CN¥2.58b and earnings per share (EPS) of CN¥0.99 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

View our latest analysis for Weaver Network Technology

The consensus price target rose 16% to CN¥44.70despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Weaver Network Technology's earnings by assigning a price premium. 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 Weaver Network Technology at CN¥74.90 per share, while the most bearish prices it at CN¥21.90. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Weaver Network Technology's revenue growth is expected to slow, with the forecast 9.4% annualised growth rate until the end of 2025 being well below the historical 14% 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 18% per year. Factoring in the forecast slowdown in growth, it seems obvious that Weaver Network Technology is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

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 estimates - from multiple Weaver Network Technology analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Weaver Network Technology has 1 warning sign we think 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.