Earnings Update: FinVolution Group (NYSE:FINV) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

Shareholders might have noticed that FinVolution Group (NYSE:FINV) filed its yearly result this time last week. The early response was not positive, with shares down 7.7% to US$4.94 in the past week. FinVolution Group reported in line with analyst predictions, delivering revenues of CN¥13b and statutory earnings per share of CN¥8.34, suggesting the business is executing well and in line with its plan. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for FinVolution Group

Taking into account the latest results, the current consensus from FinVolution Group's seven analysts is for revenues of CN¥13.6b in 2024. This would reflect a decent 8.5% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 10% to CN¥9.19. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥14.3b and earnings per share (EPS) of CN¥10.08 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the minor downgrade to earnings per share expectations.

The analysts made no major changes to their price target of US$6.26, suggesting the downgrades are not expected to have a long-term impact on FinVolution Group's 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. The most optimistic FinVolution Group analyst has a price target of US$7.20 per share, while the most pessimistic values it at US$5.30. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting FinVolution Group is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that FinVolution Group's revenue growth is expected to slow, with the forecast 8.5% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 12% annually. Factoring in the forecast slowdown in growth, it seems obvious that FinVolution Group is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for FinVolution Group. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$6.26, with the latest estimates not enough to have an impact on their price targets.

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 estimates - from multiple FinVolution Group analysts - going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - FinVolution Group has 1 warning sign we think 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.