Empyrean Technology Co., Ltd. Just Missed EPS By 81%: Here's What Analysts Think Will Happen Next

It's been a good week for Empyrean Technology Co., Ltd. (SZSE:301269) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.3% to CN¥78.20. Results overall were not great, with earnings of CN¥0.014 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥213m and were slightly better than forecasts. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Empyrean Technology after the latest results.

Check out our latest analysis for Empyrean Technology

After the latest results, the ten analysts covering Empyrean Technology are now predicting revenues of CN¥1.33b in 2024. If met, this would reflect a sizeable 25% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 66% to CN¥0.57. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.44b and earnings per share (EPS) of CN¥0.61 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.

It'll come as no surprise then, to learn that the analysts have cut their price target 6.2% to CN¥121. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Empyrean Technology at CN¥140 per share, while the most bearish prices it at CN¥100.00. 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.

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 Empyrean Technology's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 24% 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 22% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Empyrean Technology 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. 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.

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 Empyrean Technology going out to 2026, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Empyrean Technology .

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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.