CALB Group Co., Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

CALB Group Co., Ltd. (HKG:3931) missed earnings with its latest yearly results, disappointing overly-optimistic forecasters. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥27b missed by 13%, and statutory earnings per share of CN¥0.17 fell short of forecasts by 66%. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for CALB Group

After the latest results, the six analysts covering CALB Group are now predicting revenues of CN¥33.4b in 2024. If met, this would reflect a sizeable 24% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 239% to CN¥0.56. Before this earnings report, the analysts had been forecasting revenues of CN¥48.6b and earnings per share (EPS) of CN¥0.91 in 2024. Indeed, we can see that the analysts are a lot more bearish about CALB Group's prospects following the latest results, administering a large cut to revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 5.4% to HK$19.35, with the weaker earnings outlook clearly leading valuation estimates. 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. There are some variant perceptions on CALB Group, with the most bullish analyst valuing it at HK$37.58 and the most bearish at HK$10.93 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that CALB Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 24% growth on an annualised basis. This is compared to a historical growth rate of 56% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% annually. Even after the forecast slowdown in growth, it seems obvious that CALB Group is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for CALB Group. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on CALB Group. 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 CALB Group going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for CALB Group (1 is concerning!) 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.