OneSmart International Education Group Limited (NYSE:ONE) Analysts Are Cutting Their Estimates: Here's What You Need To Know

OneSmart International Education Group Limited (NYSE:ONE) shareholders are probably feeling a little disappointed, since its shares fell 2.9% to US$4.00 in the week after its latest yearly results. It was an okay result overall, with revenues coming in at CN¥3.4b, roughly what the analysts had been expecting. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for OneSmart International Education Group

Taking into account the latest results, the current consensus from OneSmart International Education Group's dual analysts is for revenues of CN¥4.32b in 2021, which would reflect a sizeable 26% increase on its sales over the past 12 months. Earnings are expected to improve, with OneSmart International Education Group forecast to report a statutory profit of CN¥1.39 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.02b and earnings per share (EPS) of CN¥2.41 in 2021. Indeed, we can see that the analysts are a lot more bearish about OneSmart International Education Group's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 17% to CN¥38.40, with the weaker earnings outlook clearly leading valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of OneSmart International Education Group'shistorical trends, as next year's 26% revenue growth is roughly in line with 24% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 23% per year. It's clear that while OneSmart International Education Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. 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.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have analyst estimates for OneSmart International Education Group going out as far as 2023, and you can see them free on our platform here.

Plus, you should also learn about the 2 warning signs we've spotted with OneSmart International Education Group (including 1 which is a bit concerning) .

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