Analysts Are Upgrading Raytron Technology Co.,Ltd. (SHSE:688002) After Its Latest Results

It's been a good week for Raytron Technology Co.,Ltd. (SHSE:688002) shareholders, because the company has just released its latest quarterly results, and the shares gained 6.4% to CN¥30.79. Results were roughly in line with estimates, with revenues of CN¥1.0b and statutory earnings per share of CN¥0.28. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Raytron TechnologyLtd

After the latest results, the five analysts covering Raytron TechnologyLtd are now predicting revenues of CN¥4.73b 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 jump 34% to CN¥1.64. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥4.44b and earnings per share (EPS) of CN¥1.55 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

As a result, it might be a surprise to see thatthe analysts have cut their price target 12% to CN¥52.19, which could suggest the forecast improvement in performance is not expected to last. 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. The most optimistic Raytron TechnologyLtd analyst has a price target of CN¥65.80 per share, while the most pessimistic values it at CN¥31.50. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 35% growth on an annualised basis. That is in line with its 35% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 17% annually. So although Raytron TechnologyLtd is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Raytron TechnologyLtd's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Raytron TechnologyLtd going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Raytron TechnologyLtd's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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.