Revenue Beat: XD Inc. Exceeded Revenue Forecasts By 20% And Analysts Are Updating Their Estimates

XD Inc. (HKG:2400) shareholders are probably feeling a little disappointed, since its shares fell 6.9% to HK$80.65 in the week after its latest half-yearly results. XD beat revenue forecasts by a solid 20% to hit CN¥3.1b. Statutory earnings per share came in at CN¥1.69, in line with expectations. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the consensus forecast from XD's twelve analysts is for revenues of CN¥6.46b in 2025. This reflects a solid 10.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 17% to CN¥3.30. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.44b and earnings per share (EPS) of CN¥3.28 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for XD

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to HK$81.23. It looks as though they previously had some doubts over whether the business would live up to their expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic XD analyst has a price target of HK$97.01 per share, while the most pessimistic values it at HK$35.23. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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 clear from the latest estimates that XD's rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 14% 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 8.8% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect XD to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple XD analysts - going out to 2027, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with XD , and understanding it should be part of your investment process.

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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.