Shanghai Friendess Electronic Technology Corporation Limited (SHSE:688188) Fell Short of Analyst Expectations: Here's What You Need To Know

It's shaping up to be a tough period for Shanghai Friendess Electronic Technology Corporation Limited (SHSE:688188), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Shanghai Friendess Electronic Technology missed analyst forecasts, with revenues of CN¥381m and statutory earnings per share (EPS) of CN¥1.32, falling short by 6.5% and 5.7% respectively. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Shanghai Friendess Electronic Technology

Following the latest results, Shanghai Friendess Electronic Technology's ten analysts are now forecasting revenues of CN¥1.92b in 2024. This would be a major 27% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 30% to CN¥7.03. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.91b and earnings per share (EPS) of CN¥6.92 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at CN¥339. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Shanghai Friendess Electronic Technology at CN¥381 per share, while the most bearish prices it at CN¥302. This is a very narrow spread of estimates, implying either that Shanghai Friendess Electronic Technology is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

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 analysts are definitely expecting Shanghai Friendess Electronic Technology's growth to accelerate, with the forecast 37% annualised growth to the end of 2024 ranking favourably alongside historical growth of 30% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shanghai Friendess Electronic Technology to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Shanghai Friendess Electronic Technology. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Shanghai Friendess Electronic Technology analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Shanghai Friendess Electronic Technology you should know about.

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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.