Revenue Miss: Neusoft Education Technology Co. Limited Fell 7.9% Short Of Analyst Revenue Estimates And Analysts Have Been Revising Their Models

The yearly results for Neusoft Education Technology Co. Limited (HKG:9616) were released last week, making it a good time to revisit its performance. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥1.3b, statutory earnings were in line with expectations, at CN¥0.41 per share. 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 Neusoft Education Technology

Following the latest results, Neusoft Education Technology's four analysts are now forecasting revenues of CN¥1.58b in 2022. This would be a huge 25% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to bounce 237% to CN¥0.56. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.65b and earnings per share (EPS) of CN¥0.56 in 2022. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

It will come as no surprise then, that the consensus price target fell 5.7% to HK$9.07following these changes. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Neusoft Education Technology analyst has a price target of HK$12.70 per share, while the most pessimistic values it at HK$5.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Neusoft Education Technology's revenue growth will slow down substantially, with revenues to the end of 2022 expected to display 25% growth on an annualised basis. This is compared to a historical growth rate of 33% over the past year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 15% annually. So it's pretty clear that, while Neusoft Education Technology's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also downgraded their revenue estimates, although industry data suggests that Neusoft Education Technology's revenues are expected to grow faster than the wider industry. With that said, earnings are more important to the long-term 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 Neusoft Education Technology. 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 Neusoft Education Technology going out to 2024, and you can see them free on our platform here..

Before you take the next step you should know about the 4 warning signs for Neusoft Education Technology that we have uncovered.

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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.