Suzhou TFC Optical Communication Co., Ltd. Just Recorded A 34% EPS Beat: Here's What Analysts Are Forecasting Next

Suzhou TFC Optical Communication Co., Ltd. (SZSE:300394) just released its latest first-quarter results and things are looking bullish. The company beat forecasts, with revenue of CN¥732m, some 6.2% above estimates, and statutory earnings per share (EPS) coming in at CN¥0.70, 34% ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Suzhou TFC Optical Communication

After the latest results, the twelve analysts covering Suzhou TFC Optical Communication are now predicting revenues of CN¥3.94b in 2024. If met, this would reflect a huge 65% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 60% to CN¥3.72. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.15b and earnings per share (EPS) of CN¥2.82 in 2024. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

It will come as no surprise to learn that the analysts have increased their price target for Suzhou TFC Optical Communication 10% to CN¥119on the back of these upgrades. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Suzhou TFC Optical Communication analyst has a price target of CN¥177 per share, while the most pessimistic values it at CN¥79.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Suzhou TFC Optical Communication's growth to accelerate, with the forecast 95% annualised growth to the end of 2024 ranking favourably alongside historical growth of 28% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Suzhou TFC Optical Communication is expected to grow much faster than its industry.

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 Suzhou TFC Optical Communication following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Suzhou TFC Optical Communication analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Suzhou TFC Optical Communication (1 makes us a bit uncomfortable!) that 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.