The XD Inc. (HKG:2400) Yearly Results Are Out And Analysts Have Published New Forecasts

XD Inc. (HKG:2400) just released its latest yearly results and things are looking bullish. It looks like a positive result overall, with revenues of CN¥3.4b beating forecasts by 2.8%. Statutory losses of CN¥1.17 per share were 2.8% smaller than the analysts expected, likely helped along by the higher revenues. 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 XD

Following the latest results, XD's ten analysts are now forecasting revenues of CN¥4.34b in 2023. This would be a huge 27% improvement in sales compared to the last 12 months. XD is also expected to turn profitable, with statutory earnings of CN¥0.33 per share. Before this latest report, the consensus had been expecting revenues of CN¥4.27b and CN¥0.11 per share in losses. Although we saw no serious change to the revenue outlook, the analysts have definitely increased their earnings estimates, estimating a profit next year, compared to previous forecasts of a loss. So it seems like the consensus has become substantially more bullish on XD.

There's been no major changes to the consensus price target of HK$32.72, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. 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 XD, with the most bullish analyst valuing it at HK$49.52 and the most bearish at HK$27.94 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. It's clear from the latest estimates that XD's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 11% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. 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 a clear step-change in belief around the business' prospects, with the analysts now expecting XD to become profitable next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 XD 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 1 warning sign for XD that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.