Earnings Miss: Universal Scientific Industrial (Shanghai) Co., Ltd. Missed EPS By 7.3% And Analysts Are Revising Their Forecasts

Universal Scientific Industrial (Shanghai) Co., Ltd. (SHSE:601231) last week reported its latest annual results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. It looks like the results were a bit of a negative overall. While revenues of CN¥61b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 7.3% to hit CN¥0.87 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Universal Scientific Industrial (Shanghai)

Taking into account the latest results, the most recent consensus for Universal Scientific Industrial (Shanghai) from six analysts is for revenues of CN¥66.9b in 2024. If met, it would imply a decent 10% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 23% to CN¥1.10. In the lead-up to this report, the analysts had been modelling revenues of CN¥67.6b and earnings per share (EPS) of CN¥1.14 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

The consensus price target held steady at CN¥17.25, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Universal Scientific Industrial (Shanghai) at CN¥20.00 per share, while the most bearish prices it at CN¥11.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. We would highlight that Universal Scientific Industrial (Shanghai)'s revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 15% p.a. growth over the last 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 Universal Scientific Industrial (Shanghai).

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse 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.

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. We have forecasts for Universal Scientific Industrial (Shanghai) going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Universal Scientific Industrial (Shanghai) has 1 warning sign we think 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.