DBAPPSecurity Co., Ltd. (SHSE:688023) Just Reported, And Analysts Assigned A CN¥140 Price Target

The analysts might have been a bit too bullish on DBAPPSecurity Co., Ltd. (SHSE:688023), given that the company fell short of expectations when it released its quarterly results last week. Statutory earnings fell substantially short of expectations, with revenues of CN¥281m missing forecasts by 37%. Losses exploded, with a per-share loss of CN¥2.54 some 257% below prior forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for DBAPPSecurity

After the latest results, the eight analysts covering DBAPPSecurity are now predicting revenues of CN¥2.44b in 2024. If met, this would reflect a solid 15% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 95% to CN¥0.24. Before this latest report, the consensus had been expecting revenues of CN¥2.45b and CN¥0.16 per share in losses. So it's pretty clear the analysts have mixed opinions on DBAPPSecurity even after this update; although they reconfirmed their revenue numbers, it came at the cost of a very substantial increase in per-share losses.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 18% to CN¥140, with the analysts signalling that growing losses would be a definite concern. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values DBAPPSecurity at CN¥192 per share, while the most bearish prices it at CN¥75.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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 clear from the latest estimates that DBAPPSecurity's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that DBAPPSecurity is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at DBAPPSecurity. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider 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. At Simply Wall St, we have a full range of analyst estimates for DBAPPSecurity going out to 2026, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.