Earnings Miss: Guangzhou Sie Consulting Co., Ltd. Missed EPS By 53% And Analysts Are Revising Their Forecasts

The analysts might have been a bit too bullish on Guangzhou Sie Consulting Co., Ltd. (SZSE:300687), given that the company fell short of expectations when it released its quarterly results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥540m missed by 16%, and statutory earnings per share of CN¥0.049 fell short of forecasts by 53%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Guangzhou Sie Consulting after the latest results.

Check out our latest analysis for Guangzhou Sie Consulting

Taking into account the latest results, the consensus forecast from Guangzhou Sie Consulting's nine analysts is for revenues of CN¥2.73b in 2024. This reflects a solid 20% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 13% to CN¥0.81. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.12b and earnings per share (EPS) of CN¥0.88 in 2024. It looks like sentiment has fallen somewhat in the aftermath of these results, with a substantial drop in revenue estimates and a small dip in earnings per share numbers as well.

The analysts made no major changes to their price target of CN¥28.59, suggesting the downgrades are not expected to have a long-term impact on Guangzhou Sie Consulting's valuation. 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 Guangzhou Sie Consulting, with the most bullish analyst valuing it at CN¥36.11 and the most bearish at CN¥19.76 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Guangzhou Sie Consulting shareholders.

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 Guangzhou Sie Consulting's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 19% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Guangzhou Sie Consulting is expected to grow much faster than its industry.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Guangzhou Sie Consulting going out to 2026, and you can see them free on our platform here..

We don't want to rain on the parade too much, but we did also find 1 warning sign for Guangzhou Sie Consulting that you need to be mindful 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.