Earnings Miss: Beijing Sinnet Technology Co.,Ltd Missed EPS By 15% And Analysts Are Revising Their Forecasts

Beijing Sinnet Technology Co.,Ltd (SZSE:300383) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to CN¥9.31 in the week after its latest annual results. It was not a great result overall. While revenues of CN¥7.9b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 15% to hit CN¥0.22 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for Beijing Sinnet TechnologyLtd

Taking into account the latest results, the most recent consensus for Beijing Sinnet TechnologyLtd from nine analysts is for revenues of CN¥8.62b in 2024. If met, it would imply a notable 9.7% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 57% to CN¥0.34. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.94b and earnings per share (EPS) of CN¥0.38 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

The consensus price target fell 6.5% to CN¥10.55, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on Beijing Sinnet TechnologyLtd, with the most bullish analyst valuing it at CN¥18.00 and the most bearish at CN¥6.64 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Beijing Sinnet TechnologyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 9.7% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 18% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Beijing Sinnet TechnologyLtd is expected to grow slower 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 Beijing Sinnet TechnologyLtd. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Beijing Sinnet TechnologyLtd's future valuation.

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

It might also be worth considering whether Beijing Sinnet TechnologyLtd's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.