Analysts Have Lowered Expectations For Sangfor Technologies Inc. (SZSE:300454) After Its Latest Results

It's shaping up to be a tough period for Sangfor Technologies Inc. (SZSE:300454), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. It was not a great result overall, as revenues of CN¥1.0b fell 23% short of analyst expectations. Unsurprisingly, statutory losses ended up being11% larger than the analysts expected, at CN¥1.16 per share. 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. 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 Sangfor Technologies

Following the latest results, Sangfor Technologies' 19 analysts are now forecasting revenues of CN¥7.96b in 2024. This would be a credible 6.3% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 161% to CN¥0.76. In the lead-up to this report, the analysts had been modelling revenues of CN¥8.50b and earnings per share (EPS) of CN¥0.80 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The analysts made no major changes to their price target of CN¥68.90, suggesting the downgrades are not expected to have a long-term impact on Sangfor Technologies' 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 Sangfor Technologies, with the most bullish analyst valuing it at CN¥90.00 and the most bearish at CN¥45.40 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. We would highlight that Sangfor Technologies' revenue growth is expected to slow, with the forecast 8.5% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 22% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sangfor Technologies is also expected to grow slower than other industry participants.

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. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Sangfor Technologies 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 2 warning signs for Sangfor Technologies 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.