Geely Automobile Holdings Limited (HKG:175) Just Reported Annual Earnings: Have Analysts Changed Their Mind On The Stock?

Investors in Geely Automobile Holdings Limited (HKG:175) had a good week, as its shares rose 5.6% to close at HK$9.20 following the release of its annual results. Geely Automobile Holdings reported CN¥179b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of CN¥0.51 beat expectations, being 3.8% higher than what the analysts expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Geely Automobile Holdings

Taking into account the latest results, the current consensus from Geely Automobile Holdings' 25 analysts is for revenues of CN¥214.1b in 2024. This would reflect a solid 19% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 38% to CN¥0.71. In the lead-up to this report, the analysts had been modelling revenues of CN¥211.4b and earnings per share (EPS) of CN¥0.69 in 2024. So the consensus seems to have become somewhat more optimistic on Geely Automobile Holdings' earnings potential following these results.

The consensus price target was unchanged at HK$13.36, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Geely Automobile Holdings at HK$20.32 per share, while the most bearish prices it at HK$9.52. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Geely Automobile Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 13% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 14% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Geely Automobile Holdings to grow faster than the wider 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 Geely Automobile Holdings following these results. 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 Geely Automobile Holdings. Long-term earnings power is much more important than next year's profits. We have forecasts for Geely Automobile Holdings going out to 2026, and you can see them free on our platform here.

We also provide an overview of the Geely Automobile Holdings Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.

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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.