Earnings Miss: Hangzhou Hikvision Digital Technology Co., Ltd. Missed EPS By 27% And Analysts Are Revising Their Forecasts

Hangzhou Hikvision Digital Technology Co., Ltd. (SZSE:002415) just released its latest quarterly report and things are not looking great. Results showed a clear earnings miss, with CN¥23b revenue coming in 5.2% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.33 missed the mark badly, arriving some 27% below what was expected. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Hangzhou Hikvision Digital Technology after the latest results.

Check out our latest analysis for Hangzhou Hikvision Digital Technology

Taking into account the latest results, the consensus forecast from Hangzhou Hikvision Digital Technology's 15 analysts is for revenues of CN¥98.3b in 2024. This reflects an okay 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 5.8% to CN¥1.60. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥100.0b and earnings per share (EPS) of CN¥1.77 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target fell 5.4% to CN¥38.44, with the analysts clearly linking lower forecast earnings to the performance of the stock price. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Hangzhou Hikvision Digital Technology, with the most bullish analyst valuing it at CN¥49.62 and the most bearish at CN¥33.00 per share. 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.

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 period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 12% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 18% annually. So although Hangzhou Hikvision Digital Technology is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Hangzhou Hikvision Digital Technology's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Hangzhou Hikvision Digital Technology. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Hangzhou Hikvision Digital Technology going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 1 warning sign for Hangzhou Hikvision Digital Technology that you need to take into consideration.

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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.