Analysts Have Been Trimming Their Qingdao AInnovation Technology Group Co., Ltd. (HKG:2121) Price Target After Its Latest Report

Qingdao AInnovation Technology Group Co., Ltd. (HKG:2121) missed earnings with its latest full-year results, disappointing overly-optimistic forecasters. Unfortunately, Qingdao AInnovation Technology Group delivered a serious earnings miss. Revenues of CN¥1.8b were 20% below expectations, and statutory losses ballooned 127% to CN¥1.05 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. 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 Qingdao AInnovation Technology Group

Following the latest results, Qingdao AInnovation Technology Group's three analysts are now forecasting revenues of CN¥2.69b in 2024. This would be a huge 53% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 82% to CN¥0.18. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥3.27b and losses of CN¥0.20 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, withthe analysts making a serious cut to their revenue forecasts while also reducing the estimated losses the business will incur.

The analysts have cut their price target 12% to HK$26.30per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. 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 Qingdao AInnovation Technology Group analyst has a price target of HK$38.51 per share, while the most pessimistic values it at HK$10.01. 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 analysts think this business will perform. As a result it might not be a great idea to make decisions based on 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. It's clear from the latest estimates that Qingdao AInnovation Technology Group's rate of growth is expected to accelerate meaningfully, with the forecast 53% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 36% 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 19% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Qingdao AInnovation Technology Group is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. They also downgraded Qingdao AInnovation Technology Group's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. With that said, earnings are more important to the long-term value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Qingdao AInnovation Technology Group going out to 2025, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.