Ming Yuan Cloud Group Holdings Limited Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

As you might know, Ming Yuan Cloud Group Holdings Limited (HKG:909) recently reported its annual numbers. Revenues fell 3.3% short of expectations, at CN¥2.2b. Earnings correspondingly dipped, with Ming Yuan Cloud Group Holdings reporting a statutory loss of CN¥0.18 per share, whereas the analysts had previously modelled a profit in this period. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ming Yuan Cloud Group Holdings after the latest results.

Check out our latest analysis for Ming Yuan Cloud Group Holdings

Following the latest results, Ming Yuan Cloud Group Holdings' 15 analysts are now forecasting revenues of CN¥2.53b in 2022. This would be a meaningful 16% improvement in sales compared to the last 12 months. Statutory losses are forecast to balloon 94% to CN¥0.011 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.76b and earnings per share (EPS) of CN¥0.20 in 2022. There looks to have been a significant drop in sentiment regarding Ming Yuan Cloud Group Holdings' prospects after these latest results, with a small dip in revenues and the analysts now forecasting a loss instead of a profit.

The average price target fell 18% to HK$22.81, implicitly signalling that lower earnings per share are a leading indicator for Ming Yuan Cloud Group Holdings' valuation. 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 Ming Yuan Cloud Group Holdings analyst has a price target of HK$44.17 per share, while the most pessimistic values it at HK$10.01. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Ming Yuan Cloud Group Holdings' revenue growth is expected to slow, with the forecast 16% annualised growth rate until the end of 2022 being well below the historical 28% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 27% annually. Factoring in the forecast slowdown in growth, it seems obvious that Ming Yuan Cloud Group Holdings is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts are expecting Ming Yuan Cloud Group Holdings to become unprofitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Ming Yuan Cloud Group Holdings' future valuation.

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 Ming Yuan Cloud Group Holdings analysts - 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 Ming Yuan Cloud Group Holdings that we have uncovered.

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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.