Results: iFLYTEK CO.,LTD Delivered A Surprise Loss And Now Analysts Have New Forecasts

As you might know, iFLYTEK CO.,LTD (SZSE:002230) recently reported its quarterly numbers. Revenues fell 3.5% short of expectations, at CN¥5.7b. Earnings correspondingly dipped, with iFLYTEKLTD reporting a statutory loss of CN¥0.04 per share, whereas the analysts had previously modelled a profit in this period. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for iFLYTEKLTD

Taking into account the latest results, the current consensus from iFLYTEKLTD's 23 analysts is for revenues of CN¥23.7b in 2024. This would reflect a notable 12% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 276% to CN¥0.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥23.2b and earnings per share (EPS) of CN¥0.35 in 2024. So it's pretty clear the analysts have mixed opinions on iFLYTEKLTD after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

The consensus price target was unchanged at CN¥49.08, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. 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 iFLYTEKLTD analyst has a price target of CN¥75.00 per share, while the most pessimistic values it at CN¥30.00. 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. The analysts are definitely expecting iFLYTEKLTD's growth to accelerate, with the forecast 26% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect iFLYTEKLTD to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for iFLYTEKLTD. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 forecasts for iFLYTEKLTD going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for iFLYTEKLTD (1 doesn't sit too well with us!) that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.