Earnings Beat: CALB Group Co., Ltd. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for CALB Group Co., Ltd. (HKG:3931) shareholders, because the company has just released its latest annual results, and the shares gained 3.3% to HK$19.62. The results were mixed; although revenues of CN¥20b fell 19% short of what the analysts had predicted, per-share (statutory) earnings of CN¥0.44 beat expectations by 52%. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Check out our latest analysis for CALB Group

Taking into account the latest results, the consensus forecast from CALB Group's eleven analysts is for revenues of CN¥51.7b in 2023, which would reflect a huge 154% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to plunge 53% to CN¥1.24 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥53.2b and earnings per share (EPS) of CN¥1.28 in 2023. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of HK$32.64, suggesting the downgrades are not expected to have a long-term impact on CALB Group's valuation. 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 CALB Group, with the most bullish analyst valuing it at HK$44.38 and the most bearish at HK$11.30 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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 analysts are definitely expecting CALB Group's growth to accelerate, with the forecast 154% annualised growth to the end of 2023 ranking favourably alongside historical growth of 69% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CALB Group 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. 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 CALB Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple CALB Group analysts - going out to 2025, and you can see them free on our platform here.

Even so, be aware that CALB Group is showing 1 warning sign in our investment analysis , you should know about...

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.