CIMC Vehicles (Group) Co., Ltd. Just Missed Revenue By 23%: Here's What Analysts Think Will Happen Next

CIMC Vehicles (Group) Co., Ltd. (HKG:1839) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were CN¥6.1b, 23% shy of what the analysts were expecting, although statutory earnings of CN¥0.55 per share were roughly in line with what was forecast. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for CIMC Vehicles (Group)

Taking into account the latest results, the most recent consensus for CIMC Vehicles (Group) from four analysts is for revenues of CN¥33.1b in 2024. If met, it would imply a sizeable 28% increase on its revenue over the past 12 months. Statutory earnings per share are expected to plummet 26% to CN¥1.00 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥34.2b and earnings per share (EPS) of CN¥1.18 in 2024. The analysts seem less optimistic after the recent results, reducing their revenue forecasts and making a real cut to earnings per share numbers.

It'll come as no surprise then, to learn that the analysts have cut their price target 8.5% to HK$10.51. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic CIMC Vehicles (Group) analyst has a price target of HK$12.99 per share, while the most pessimistic values it at HK$8.04. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await CIMC Vehicles (Group) shareholders.

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. It's clear from the latest estimates that CIMC Vehicles (Group)'s rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 1.0% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 12% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CIMC Vehicles (Group) to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded CIMC Vehicles (Group)'s revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of CIMC Vehicles (Group)'s future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for CIMC Vehicles (Group) going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - CIMC Vehicles (Group) has 2 warning signs (and 1 which is significant) we think you should know about.

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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.