Yeahka Limited Just Recorded A 14% EPS Beat: Here's What Analysts Are Forecasting Next

A week ago, Yeahka Limited (HKG:9923) came out with a strong set of full-year numbers that could potentially lead to a re-rate of the stock. Yeahka beat earnings, with revenues hitting CN¥3.1b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 14%. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

See our latest analysis for Yeahka

Taking into account the latest results, the most recent consensus for Yeahka from ten analysts is for revenues of CN¥4.35b in 2022 which, if met, would be a sizeable 42% increase on its sales over the past 12 months. Statutory earnings per share are predicted to accumulate 4.0% to CN¥0.99. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥4.35b and earnings per share (EPS) of CN¥0.96 in 2022. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The consensus price target fell 5.7% to HK$32.31, suggesting the increase in earnings forecasts was not enough to offset other the analysts concerns. 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. Currently, the most bullish analyst values Yeahka at HK$43.00 per share, while the most bearish prices it at HK$26.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Yeahka shareholders.

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. It's clear from the latest estimates that Yeahka's rate of growth is expected to accelerate meaningfully, with the forecast 42% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 32% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Yeahka is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Yeahka following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Yeahka's future valuation.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Yeahka 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 3 warning signs for Yeahka 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.