Analysts Have Been Trimming Their Venustech Group Inc. (SZSE:002439) Price Target After Its Latest Report

It's been a good week for Venustech Group Inc. (SZSE:002439) shareholders, because the company has just released its latest second-quarter results, and the shares gained 2.2% to CN¥13.21. Revenues came in at CN¥651m, a whole 21% below what the analysts were forecasting. Losses were a (relative) bright spot by comparison, with a per-share (statutory) loss of CN¥0.06 substantially smaller than what was expected. 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 Venustech Group after the latest results.

Check out our latest analysis for Venustech Group

Taking into account the latest results, the most recent consensus for Venustech Group from 17 analysts is for revenues of CN¥5.15b in 2024. If met, it would imply a notable 13% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 122% to CN¥0.69. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.38b and earnings per share (EPS) of CN¥0.73 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The consensus price target fell 5.3% to CN¥23.15, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Venustech Group analyst has a price target of CN¥28.00 per share, while the most pessimistic values it at CN¥17.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Venustech Group's growth to accelerate, with the forecast 27% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% 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. Factoring in the forecast acceleration in revenue, it's pretty clear that Venustech Group is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Venustech Group. They also downgraded Venustech Group's revenue estimates, but industry data suggests that it is expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Venustech Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Venustech Group analysts - going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 4 warning signs for Venustech Group you should be aware of.

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.