Lifestyle International Holdings Limited Just Beat EPS By 50%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Lifestyle International Holdings Limited (HKG:1212) filed its yearly result this time last week. The early response was not positive, with shares down 3.2% to HK$6.95 in the past week. It looks like a credible result overall - although revenues of HK$2.0b were what the analysts expected, Lifestyle International Holdings surprised by delivering a (statutory) profit of HK$0.09 per share, an impressive 50% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Lifestyle International Holdings

Taking into account the latest results, the most recent consensus for Lifestyle International Holdings from seven analysts is for revenues of HK$2.56b in 2021 which, if met, would be a huge 29% increase on its sales over the past 12 months. Statutory earnings per share are predicted to soar 635% to HK$0.66. Before this earnings report, the analysts had been forecasting revenues of HK$2.57b and earnings per share (EPS) of HK$0.67 in 2021. 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.

There were no changes to revenue or earnings estimates or the price target of HK$8.11, suggesting that the company has met expectations in its recent result. 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 Lifestyle International Holdings analyst has a price target of HK$9.80 per share, while the most pessimistic values it at HK$7.07. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that Lifestyle International Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 29% annualised growth until the end of 2021. If achieved, this would be a much better result than the 13% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 8.8% annually. So it looks like Lifestyle International Holdings is expected to grow faster than its competitors, at least for a while.

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. 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.

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 Lifestyle International Holdings analysts - going out to 2023, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 3 warning signs for Lifestyle International Holdings you should be aware of, and 1 of them doesn't sit too well with us.

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