It's shaping up to be a tough period for Unigroup Guoxin Microelectronics Co., Ltd. (SZSE:002049), which a week ago released some disappointing annual results that could have a notable impact on how the market views the stock. Results look to have been somewhat negative - revenue fell 3.8% short of analyst estimates at CN¥7.6b, and statutory earnings of CN¥2.99 per share missed forecasts by 7.9%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the consensus forecast from Unigroup Guoxin Microelectronics' five analysts is for revenues of CN¥9.03b in 2024. This reflects a decent 19% improvement in revenue compared to the last 12 months. Per-share earnings are expected to soar 35% to CN¥4.06. Before this earnings report, the analysts had been forecasting revenues of CN¥10.1b and earnings per share (EPS) of CN¥4.44 in 2024. Indeed, we can see that sentiment has declined measurably after results came out, with a real cut to revenue estimates and a small dip in EPS estimates to boot.
The consensus price target fell 22% to CN¥83.08, with the weaker earnings outlook clearly leading valuation estimates. 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 Unigroup Guoxin Microelectronics analyst has a price target of CN¥109 per share, while the most pessimistic values it at CN¥48.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. It's pretty clear that there is an expectation that Unigroup Guoxin Microelectronics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Compare this to the 213 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. So it's pretty clear that, while Unigroup Guoxin Microelectronics' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. 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. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Unigroup Guoxin Microelectronics' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Unigroup Guoxin Microelectronics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Unigroup Guoxin Microelectronics going out to 2026, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Unigroup Guoxin Microelectronics , and understanding this should be part of your investment process.
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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.