Noah Holdings Limited (NYSE:NOAH) Just Reported, And Analysts Assigned A US$14.26 Price Target

It's been a good week for Noah Holdings Limited (NYSE:NOAH) shareholders, because the company has just released its latest second-quarter results, and the shares gained 3.2% to US$8.28. Revenues came in 4.1% below expectations, at CN¥616m. Statutory earnings per share were relatively better off, with a per-share profit of CN¥14.53 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Noah Holdings

After the latest results, the consensus from Noah Holdings' eight analysts is for revenues of CN¥2.71b in 2024, which would reflect a discernible 3.9% decline in revenue compared to the last year of performance. Statutory earnings per share are predicted to soar 35% to CN¥13.86. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.12b and earnings per share (EPS) of CN¥14.02 in 2024. So there's been a clear change in sentiment after these results, with the analysts making a substantial drop in revenues and reconfirming their earnings per share estimates.

It will come as no surprise then, that the consensus price target fell 13% to US$14.26following these changes. 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. There are some variant perceptions on Noah Holdings, with the most bullish analyst valuing it at US$24.37 and the most bearish at US$9.04 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. Over the past five years, revenues have declined around 1.5% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 7.6% decline in revenue until the end of 2024. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.5% annually. So it's pretty clear that, while it does have declining revenues, the analysts also expect Noah Holdings to suffer worse than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings are more important to the intrinsic value of the business. 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 estimates - from multiple Noah Holdings analysts - going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Noah Holdings you should know about.

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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.