Results: Zhen Ding Technology Holding Limited Exceeded Expectations And The Consensus Has Updated Its Estimates

Zhen Ding Technology Holding Limited (TWSE:4958) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Revenues were NT$32b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at NT$0.51, an impressive 21% ahead of estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Zhen Ding Technology Holding

After the latest results, the eight analysts covering Zhen Ding Technology Holding are now predicting revenues of NT$169.5b in 2024. If met, this would reflect a satisfactory 5.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 9.6% to NT$8.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of NT$168.1b and earnings per share (EPS) of NT$9.09 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at NT$148, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values Zhen Ding Technology Holding at NT$180 per share, while the most bearish prices it at NT$120. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. The analysts are definitely expecting Zhen Ding Technology Holding's growth to accelerate, with the forecast 10% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 13% annually. So it's clear that despite the acceleration in growth, Zhen Ding Technology Holding is expected to grow meaningfully slower than the industry average.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at NT$148, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Zhen Ding Technology Holding. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Zhen Ding Technology Holding going out to 2026, and you can see them free on our platform here..

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Zhen Ding Technology Holding that you should be aware 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.