China Education Group Holdings Limited Just Missed EPS By 80%: Here's What Analysts Think Will Happen Next

China Education Group Holdings Limited (HKG:839) shareholders are probably feeling a little disappointed, since its shares fell 7.1% to HK$3.64 in the week after its latest full-year results. It looks like a pretty bad result, all things considered. Although revenues of CN¥6.6b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 80% to hit CN¥0.16 per share. 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 China Education Group Holdings

After the latest results, the twelve analysts covering China Education Group Holdings are now predicting revenues of CN¥7.21b in 2025. If met, this would reflect a notable 9.6% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 423% to CN¥0.81. In the lead-up to this report, the analysts had been modelling revenues of CN¥7.43b and earnings per share (EPS) of CN¥0.89 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The consensus price target fell 14% to HK$6.24, with the weaker earnings outlook clearly leading valuation estimates. 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 China Education Group Holdings analyst has a price target of HK$10.41 per share, while the most pessimistic values it at HK$2.06. 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. 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.

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 pretty clear that there is an expectation that China Education Group Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 9.6% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 14% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than China Education Group Holdings.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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 China Education Group Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple China Education Group Holdings analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 4 warning signs for China Education Group Holdings 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.