SmarTone Telecommunications Holdings Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Investors in SmarTone Telecommunications Holdings Limited (HKG:315) had a good week, as its shares rose 2.6% to close at HK$3.94 following the release of its full-year results. Results look mixed - while revenue fell marginally short of analyst estimates at HK$6.2b, statutory earnings beat expectations 6.2%, with SmarTone Telecommunications Holdings reporting profits of HK$0.43 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for SmarTone Telecommunications Holdings

Following last week's earnings report, SmarTone Telecommunications Holdings' two analysts are forecasting 2025 revenues to be HK$6.30b, approximately in line with the last 12 months. Statutory earnings per share are expected to reduce 2.3% to HK$0.42 in the same period. In the lead-up to this report, the analysts had been modelling revenues of HK$6.49b and earnings per share (EPS) of HK$0.41 in 2025. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was steady at HK$4.20even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. From these estimates it looks as though the analysts expect the years of declining revenue to come to an end, given the flat forecast out to 2025. That would be a definite improvement, given that the past five years have seen revenue shrink 3.3% annually. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 5.0% annually. Although SmarTone Telecommunications Holdings' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. 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. We have analyst estimates for SmarTone Telecommunications Holdings going out as far as 2027, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for SmarTone Telecommunications Holdings (1 is concerning!) that you need to be mindful of.

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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.