Earnings Update: Guangzhou Fangbang Electronics Co.,Ltd (SHSE:688020) Just Reported And Analysts Are Trimming Their Forecasts

It's been a good week for Guangzhou Fangbang Electronics Co.,Ltd (SHSE:688020) shareholders, because the company has just released its latest first-quarter results, and the shares gained 9.0% to CN¥28.62. Revenues fell badly short of expectations, with revenue of CN¥67m, missing analyst estimates by 40%. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analyst latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Guangzhou Fangbang ElectronicsLtd

After the latest results, the one analyst covering Guangzhou Fangbang ElectronicsLtd are now predicting revenues of CN¥411.0m in 2024. If met, this would reflect a major 22% improvement in revenue compared to the last 12 months. Earnings are expected to improve, with Guangzhou Fangbang ElectronicsLtd forecast to report a statutory profit of CN¥0.01 per share. Before this earnings report, the analyst had been forecasting revenues of CN¥614.0m and earnings per share (EPS) of CN¥0.93 in 2024. Indeed, we can see that the analyst is a lot more bearish about Guangzhou Fangbang ElectronicsLtd's prospects following the latest results, administering a large cut to revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 34% to CN¥45.00, with the weaker earnings outlook clearly leading valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analyst is definitely expecting Guangzhou Fangbang ElectronicsLtd's growth to accelerate, with the forecast 31% annualised growth to the end of 2024 ranking favourably alongside historical growth of 4.4% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 17% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analyst also expect Guangzhou Fangbang ElectronicsLtd to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst 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. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Guangzhou Fangbang ElectronicsLtd's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2025, which can be seen for free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Guangzhou Fangbang ElectronicsLtd 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.