Autohome Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Last week, you might have seen that Autohome Inc. (NYSE:ATHM) released its second-quarter result to the market. The early response was not positive, with shares down 7.6% to US$22.99 in the past week. It looks like a credible result overall - although revenues of CN¥1.9b were in line with what the analysts predicted, Autohome surprised by delivering a statutory profit of CN¥4.20 per share, a notable 15% above expectations. 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.

View our latest analysis for Autohome

Taking into account the latest results, Autohome's 16 analysts currently expect revenues in 2024 to be CN¥7.28b, approximately in line with the last 12 months. Statutory earnings per share are expected to dip 5.4% to CN¥14.73 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥7.21b and earnings per share (EPS) of CN¥14.25 in 2024. So the consensus seems to have become somewhat more optimistic on Autohome's earnings potential following these results.

There's been no major changes to the consensus price target of US$29.26, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Autohome, with the most bullish analyst valuing it at US$34.00 and the most bearish at US$24.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2024 compared to the historical decline of 4.6% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 10% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Autohome to suffer worse than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Autohome's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Autohome's revenue is expected to perform worse than the wider industry. 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.

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 forecasts for Autohome going out to 2026, and you can see them free on our platform here.

You still need to take note of risks, for example - Autohome 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com