Earnings Miss: China Transinfo Technology Co., Ltd Missed EPS And Analysts Are Revising Their Forecasts

Last week, you might have seen that China Transinfo Technology Co., Ltd (SZSE:002373) released its quarterly result to the market. The early response was not positive, with shares down 3.7% to CN¥9.51 in the past week. Revenues of CN¥1.6b beat estimates by a substantial 23% margin, but unfortunately China Transinfo Technology fell substantially short of earnings forecasts, reporting a statutory loss of CN¥0.04 per share, where the analysts had previously predicted a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for China Transinfo Technology

Taking into account the latest results, the most recent consensus for China Transinfo Technology from seven analysts is for revenues of CN¥9.54b in 2024. If met, it would imply a huge 22% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 73% to CN¥0.36. In the lead-up to this report, the analysts had been modelling revenues of CN¥9.71b and earnings per share (EPS) of CN¥0.44 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a real cut to EPS estimates.

It might be a surprise to learn that the consensus price target was broadly unchanged at CN¥12.33, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on China Transinfo Technology, with the most bullish analyst valuing it at CN¥13.90 and the most bearish at CN¥8.90 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Transinfo Technology's past performance and to peers in the same industry. For example, we noticed that China Transinfo Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 31% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 2.3% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 19% per year. Not only are China Transinfo Technology's revenues expected to improve, it seems that the analysts are also expecting it 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 China Transinfo Technology. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CN¥12.33, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple China Transinfo Technology analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of China Transinfo Technology's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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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.