It's been a sad week for Kanzhun Limited (NASDAQ:BZ), who've watched their investment drop 18% to US$14.03 in the week since the company reported its quarterly result. Results were roughly in line with estimates, with revenues of CN¥1.3b and statutory earnings per share of CN¥0.24. 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 Kanzhun
Taking into account the latest results, the consensus forecast from Kanzhun's 13 analysts is for revenues of CN¥5.97b in 2023, which would reflect a sizeable 28% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to surge 332% to CN¥1.51. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.05b and earnings per share (EPS) of CN¥1.37 in 2023. There was no real change to the revenue estimates, but the analysts do seem more bullish on earnings, given the substantial gain in earnings per share expectations following these results.
The consensus price target was unchanged at US$23.66, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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 Kanzhun, with the most bullish analyst valuing it at US$26.92 and the most bearish at US$20.65 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Kanzhun's growth to accelerate, with the forecast 40% annualised growth to the end of 2023 ranking favourably alongside historical growth of 0.9% per annum over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.7% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Kanzhun is expected to grow much faster than its industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Kanzhun's earnings potential next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster 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 Kanzhun going out to 2025, and you can see them free on our platform here.
We also provide an overview of the Kanzhun Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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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.