Goodbaby International Holdings Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

It's been a good week for Goodbaby International Holdings Limited (HKG:1086) shareholders, because the company has just released its latest full-year results, and the shares gained 6.6% to HK$0.97. Statutory earnings per share fell badly short of expectations, coming in at HK$0.07, some 59% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at HK$9.7b. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Goodbaby International Holdings

After the latest results, the two analysts covering Goodbaby International Holdings are now predicting revenues of HK$10.7b in 2022. If met, this would reflect a solid 11% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 143% to HK$0.18. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$10.3b and earnings per share (EPS) of HK$0.21 in 2022. While next year's revenue estimates increased, there was also a real cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The analysts also cut Goodbaby International Holdings' price target 8.9% to HK$1.44, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in sales.

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 Goodbaby International Holdings' growth to accelerate, with the forecast 11% annualised growth to the end of 2022 ranking favourably alongside historical growth of 7.0% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 9.4% per year. Goodbaby International Holdings is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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 Goodbaby International Holdings. Long-term earnings power is much more important than next year's profits. We have analyst estimates for Goodbaby International Holdings going out as far as 2023, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Goodbaby International Holdings 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.