Results: Zhejiang Crystal-Optech Co., Ltd Beat Earnings Expectations And Analysts Now Have New Forecasts

A week ago, Zhejiang Crystal-Optech Co., Ltd (SZSE:002273) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at CN¥1.3b, while EPS were CN¥0.13 beating analyst models by 24%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Zhejiang Crystal-Optech

Taking into account the latest results, the consensus forecast from Zhejiang Crystal-Optech's eight analysts is for revenues of CN¥6.38b in 2024. This reflects a meaningful 15% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 18% to CN¥0.58. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.25b and earnings per share (EPS) of CN¥0.56 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.

Despite these upgrades,the analysts have not made any major changes to their price target of CN¥17.12, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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 Zhejiang Crystal-Optech analyst has a price target of CN¥18.00 per share, while the most pessimistic values it at CN¥14.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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. It's clear from the latest estimates that Zhejiang Crystal-Optech's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 14% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 18% per year. Zhejiang Crystal-Optech is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Zhejiang Crystal-Optech following these results. They also upgraded their revenue forecasts, although the latest estimates suggest that Zhejiang Crystal-Optech will grow in line with the overall industry. The consensus price target held steady at CN¥17.12, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Zhejiang Crystal-Optech analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Zhejiang Crystal-Optech is showing 1 warning sign in our investment analysis , you should know about...

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.