Yusys Technologies Co., Ltd. Just Missed EPS By 14%: Here's What Analysts Think Will Happen Next

Yusys Technologies Co., Ltd. (SZSE:300674) came out with its full-year results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were in line with forecasts, at CN¥5.2b, although statutory earnings per share came in 14% below what the analysts expected, at CN¥0.47 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Yusys Technologies

After the latest results, the ten analysts covering Yusys Technologies are now predicting revenues of CN¥5.91b in 2024. If met, this would reflect a solid 14% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 24% to CN¥0.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.20b and earnings per share (EPS) of CN¥0.72 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 8.1% to CN¥19.32, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Yusys Technologies, with the most bullish analyst valuing it at CN¥23.50 and the most bearish at CN¥14.94 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Yusys Technologies' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 17% 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. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Yusys Technologies.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Yusys Technologies. 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. 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 Yusys Technologies. Long-term earnings power is much more important than next year's profits. We have forecasts for Yusys Technologies going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Yusys Technologies that you need to take into consideration.

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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.