Chongqing Water Group Co.,Ltd. Just Missed EPS By 32%: Here's What Analysts Think Will Happen Next

The analyst might have been a bit too bullish on Chongqing Water Group Co.,Ltd. (SHSE:601158), given that the company fell short of expectations when it released its yearly results last week. Unfortunately, Chongqing Water GroupLtd delivered a serious earnings miss. Revenues of CN¥7.3b were 13% below expectations, and statutory earnings per share of CN¥0.23 missed estimates by 32%. This is an important time for investors, as they can track a company's performance in its report, look at what expert is forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimate suggests is in store for next year.

Check out our latest analysis for Chongqing Water GroupLtd

Following the latest results, Chongqing Water GroupLtd's sole analyst are now forecasting revenues of CN¥7.88b in 2024. This would be a meaningful 8.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to climb 10% to CN¥0.25. In the lead-up to this report, the analyst had been modelling revenues of CN¥8.98b and earnings per share (EPS) of CN¥0.38 in 2024. Indeed, we can see that the analyst is a lot more bearish about Chongqing Water GroupLtd's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analyst made no major changes to their price target of CN¥7.33, suggesting the downgrades are not expected to have a long-term impact on Chongqing Water GroupLtd's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analyst, with revenue forecast to display 8.6% growth on an annualised basis. That is in line with its 9.2% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 9.3% per year. So although Chongqing Water GroupLtd is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Chongqing Water GroupLtd. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

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 2026, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Chongqing Water GroupLtd , and understanding them should be part of your investment process.

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.