The Consensus EPS Estimates For Smoore International Holdings Limited (HKG:6969) Just Fell Dramatically

One thing we could say about the analysts on Smoore International Holdings Limited (HKG:6969) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Smoore International Holdings' 15 analysts is for revenues of CN¥15b in 2022 which - if met - would reflect a credible 6.5% increase on its sales over the past 12 months. Statutory earnings per share are anticipated to decline 11% to CN¥0.79 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥18b and earnings per share (EPS) of CN¥1.09 in 2022. Indeed, we can see that the analysts are a lot more bearish about Smoore International Holdings' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Smoore International Holdings

It'll come as no surprise then, to learn that the analysts have cut their price target 23% to CN¥30.02. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Smoore International Holdings, with the most bullish analyst valuing it at CN¥53.82 and the most bearish at CN¥20.99 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 think this business will perform. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Smoore International Holdings' revenue growth is expected to slow, with the forecast 6.5% annualised growth rate until the end of 2022 being well below the historical 34% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 7.7% annually. So it's pretty clear that, while Smoore International Holdings' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Smoore International Holdings. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Smoore International Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Smoore International Holdings going out to 2024, and you can see them free on our platform here.

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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.