Empyrean Technology Co., Ltd. Just Missed EPS By 56%: Here's What Analysts Think Will Happen Next

As you might know, Empyrean Technology Co., Ltd. (SZSE:301269) last week released its latest quarterly, and things did not turn out so great for shareholders. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥230m) coming in 30% below what they had expected. Statutory earnings per share of CN¥0.06 fell 56% short. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Empyrean Technology

Following the latest results, Empyrean Technology's nine analysts are now forecasting revenues of CN¥1.31b in 2024. This would be a huge 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 5.2% to CN¥0.30. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.36b and earnings per share (EPS) of CN¥0.39 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.1% to CN¥103. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Empyrean Technology, with the most bullish analyst valuing it at CN¥125 and the most bearish at CN¥83.18 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.

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. It's clear from the latest estimates that Empyrean Technology's rate of growth is expected to accelerate meaningfully, with the forecast 56% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Empyrean Technology to grow faster 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 Empyrean Technology. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Empyrean Technology 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 Empyrean Technology 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.