It's been a pretty great week for Science Environmental Protection Co., Ltd. (SHSE:688480) shareholders, with its shares surging 10% to CN¥34.00 in the week since its latest annual results. It looks like a credible result overall - although revenues of CN¥808m were in line with what the analyst predicted, Science Environmental Protection surprised by delivering a statutory profit of CN¥0.98 per share, a notable 10% above expectations. Following the result, the analyst has 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. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.
After the latest results, the single analyst covering Science Environmental Protection are now predicting revenues of CN¥1.37b in 2024. If met, this would reflect a huge 70% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 123% to CN¥2.12. In the lead-up to this report, the analyst had been modelling revenues of CN¥1.29b and earnings per share (EPS) of CN¥1.68 in 2024. There's been a pretty noticeable increase in sentiment, with the analyst upgrading revenues and making a very substantial lift in earnings per share in particular.
Althoughthe analyst has upgraded their earnings estimates, there was no change to the consensus price target of CN¥46.64, suggesting that the forecast performance does not have a long term impact on the company's valuation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analyst is definitely expecting Science Environmental Protection's growth to accelerate, with the forecast 70% annualised growth to the end of 2024 ranking favourably alongside historical growth of 15% 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 grow their revenue at 19% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Science Environmental Protection 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 Science Environmental Protection's earnings potential next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at CN¥46.64, with the latest estimates not enough to have an impact on their price target.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Science Environmental Protection going out as far as 2025, 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 Science Environmental Protection 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.