Results: Glodon Company Limited Beat Earnings Expectations And Analysts Now Have New Forecasts

Glodon Company Limited (SZSE:002410) shareholders are probably feeling a little disappointed, since its shares fell 2.4% to CN¥9.68 in the week after its latest quarterly results. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at CN¥1.7b, statutory earnings beat expectations by a notable 18%, coming in at CN¥0.11 per share. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Glodon

Taking into account the latest results, the current consensus from Glodon's 20 analysts is for revenues of CN¥6.63b in 2024. This would reflect a satisfactory 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 781% to CN¥0.32. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.70b and earnings per share (EPS) of CN¥0.29 in 2024. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the nice gain to earnings per share expectations following these results.

There's been no major changes to the consensus price target of CN¥12.73, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Glodon, with the most bullish analyst valuing it at CN¥20.20 and the most bearish at CN¥9.60 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Glodon's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.7% growth on an annualised basis. This is compared to a historical growth rate of 16% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. Factoring in the forecast slowdown in growth, it seems obvious that Glodon is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Glodon's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Glodon's revenue is expected to perform worse than the wider industry. The consensus price target held steady at CN¥12.73, with the latest estimates not enough to have an impact on their price targets.

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

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Glodon that you should be aware of.

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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.