Shareholders of Zhejiang Crystal-Optech Co., Ltd (SZSE:002273) will be pleased this week, given that the stock price is up 19% to CN¥15.55 following its latest annual results. Revenues came in 6.7% below expectations, at CN¥5.1b. Statutory earnings per share were relatively better off, with a per-share profit of CN¥0.43 being roughly in line with analyst estimates. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Zhejiang Crystal-Optech from five analysts is for revenues of CN¥6.14b in 2024. If met, it would imply a sizeable 21% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 28% to CN¥0.56. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.68b and earnings per share (EPS) of CN¥0.57 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The analysts have also increased their price target 11% to CN¥16.14, clearly signalling that lower revenue forecasts next year are not expected to have a material impact on Zhejiang Crystal-Optech's valuation. 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. The most optimistic Zhejiang Crystal-Optech analyst has a price target of CN¥18.00 per share, while the most pessimistic values it at CN¥14.00. This is a very narrow spread of estimates, implying either that Zhejiang Crystal-Optech is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Zhejiang Crystal-Optech's growth to accelerate, with the forecast 21% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Zhejiang Crystal-Optech is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. With that said, earnings are more important to the long-term value of the business. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Zhejiang Crystal-Optech. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zhejiang Crystal-Optech analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for Zhejiang Crystal-Optech 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.