Eoptolink Technology Inc., Ltd. (SZSE:300502) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 16% higher than the analysts had forecast, at CN¥1.1b, while EPS were CN¥0.46 beating analyst models by 53%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Eoptolink Technology after the latest results.
Taking into account the latest results, the current consensus from Eoptolink Technology's eight analysts is for revenues of CN¥6.09b in 2024. This would reflect a major 69% increase on its revenue over the past 12 months. Per-share earnings are expected to leap 63% to CN¥2.08. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.43b and earnings per share (EPS) of CN¥1.75 in 2024. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.
With these upgrades, we're not surprised to see that the analysts have lifted their price target 18% to CN¥69.29per share. 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 Eoptolink Technology, with the most bullish analyst valuing it at CN¥81.80 and the most bearish at CN¥40.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the 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. The analysts are definitely expecting Eoptolink Technology's growth to accelerate, with the forecast 101% annualised growth to the end of 2024 ranking favourably alongside historical growth of 24% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Eoptolink Technology to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Eoptolink Technology following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. 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 said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Eoptolink Technology going out to 2025, 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 Eoptolink Technology , 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.