Taiji Computer Corporation Limited Just Missed EPS By 19%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Taiji Computer Corporation Limited (SZSE:002368), given that the company fell short of expectations when it released its full-year results last week. It looks like a clear earnings miss, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥9.2b missed by 11%, and statutory earnings per share of CN¥0.61 fell short of forecasts by 19%. 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 Taiji Computer after the latest results.

See our latest analysis for Taiji Computer

Taking into account the latest results, the current consensus from Taiji Computer's seven analysts is for revenues of CN¥10.7b in 2024. This would reflect a solid 16% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 51% to CN¥0.91. In the lead-up to this report, the analysts had been modelling revenues of CN¥12.7b and earnings per share (EPS) of CN¥0.98 in 2024. It looks like sentiment has fallen somewhat in the aftermath of these results, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 7.9% to CN¥37.27. 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 Taiji Computer at CN¥40.00 per share, while the most bearish prices it at CN¥34.53. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Taiji Computer's past performance and to peers in the same industry. It's clear from the latest estimates that Taiji Computer's rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 19% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Taiji Computer is expected to grow slower than the wider 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Taiji Computer going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 2 warning signs for Taiji Computer (1 doesn't sit too well with us!) that we have uncovered.

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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.