Powerlong Commercial Management Holdings Limited Just Recorded A 8.1% EPS Beat: Here's What Analysts Are Forecasting Next

Powerlong Commercial Management Holdings Limited (HKG:9909) shareholders are probably feeling a little disappointed, since its shares fell 2.8% to HK$24.70 in the week after its latest yearly results. Revenues came up short, as sales of HK$1.7b were 17% below what the analysts had predicted. Profits didn't suffer quite so much, with statutory per-share earnings of HK$0.49 being coming in 8.1% above what was forecast. 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 Powerlong Commercial Management Holdings

Taking into account the latest results, the consensus forecast from Powerlong Commercial Management Holdings' ten analysts is for revenues of HK$3.33b in 2021, which would reflect a major 91% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 76% to HK$0.85. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$2.82b and earnings per share (EPS) of HK$0.70 in 2021. So we can see there's been a pretty clear increase in sentiment following the latest results, with both revenues and earnings per share receiving a decent lift in the latest estimates.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of CN¥26.33, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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 Powerlong Commercial Management Holdings analyst has a price target of CN¥50.37 per share, while the most pessimistic values it at CN¥17.40. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. 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.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Powerlong Commercial Management Holdings' growth to accelerate, with the forecast 91% annualised growth to the end of 2021 ranking favourably alongside historical growth of 23% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Powerlong Commercial Management Holdings to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Powerlong Commercial Management Holdings' earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is 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 Powerlong Commercial Management Holdings going out to 2025, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Powerlong Commercial Management Holdings that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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