Earnings Miss: Sangfor Technologies Inc. Missed EPS By 23% And Analysts Are Revising Their Forecasts

Sangfor Technologies Inc. (SZSE:300454) just released its latest full-year report and things are not looking great. Results showed a clear earnings miss, with CN¥7.5b revenue coming in 4.0% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.47 missed the mark badly, arriving some 23% below 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Following the latest results, Sangfor Technologies' 15 analysts are now forecasting revenues of CN¥8.64b in 2025. This would be a meaningful 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 111% to CN¥1.00. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.89b and earnings per share (EPS) of CN¥1.05 in 2025. 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.

View our latest analysis for Sangfor Technologies

What's most unexpected is that the consensus price target rose 15% to CN¥103, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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¥158 and the most bearish at CN¥30.80 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 Sangfor Technologies' growth to accelerate, with the forecast 15% annualised growth to the end of 2025 ranking favourably alongside historical growth of 9.8% per annum 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, Sangfor Technologies 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 Sangfor Technologies. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Sangfor Technologies going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Sangfor Technologies you should know about.

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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.