Beijing Kingsoft Office Software, Inc. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Beijing Kingsoft Office Software, Inc. (SHSE:688111) just released its latest quarterly report and things are not looking great. Beijing Kingsoft Office Software missed analyst forecasts, with revenues of CN¥1.2b and statutory earnings per share (EPS) of CN¥0.77, falling short by 10.0% and 6.6% respectively. 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.

See our latest analysis for Beijing Kingsoft Office Software

After the latest results, the 25 analysts covering Beijing Kingsoft Office Software are now predicting revenues of CN¥5.19b in 2024. If met, this would reflect a solid 8.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 7.8% to CN¥3.36. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.51b and earnings per share (EPS) of CN¥3.58 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The consensus price target fell 6.5% to CN¥284, with the weaker earnings outlook clearly leading valuation estimates. 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 Beijing Kingsoft Office Software analyst has a price target of CN¥384 per share, while the most pessimistic values it at CN¥130. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Beijing Kingsoft Office Software's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Beijing Kingsoft Office Software's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% annually. So it's pretty clear that, while Beijing Kingsoft Office Software's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

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 Beijing Kingsoft Office Software analysts - 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.