It's been a good week for Glodon Company Limited (SZSE:002410) shareholders, because the company has just released its latest first-quarter results, and the shares gained 8.5% to CN¥10.98. Statutory earnings per share disappointed, coming in -79% short of expectations, at CN¥0.0037. Fortunately revenue performance was a lot stronger at CN¥1.3b arriving 18% ahead of predictions. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Glodon's 26 analysts is for revenues of CN¥6.71b in 2024. This would reflect a reasonable 2.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 38,016% to CN¥0.50. In the lead-up to this report, the analysts had been modelling revenues of CN¥6.93b and earnings per share (EPS) of CN¥0.35 in 2024. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the very substantial lift in to the earnings per share numbers.
The analysts have cut their price target 16% to CN¥15.86per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. 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. Currently, the most bullish analyst values Glodon at CN¥23.00 per share, while the most bearish prices it at CN¥10.50. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Glodon's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Glodon's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.7% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 22% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Glodon.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Glodon's earnings potential next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Glodon's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Glodon going out to 2026, and you can see them free on our platform here..
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Glodon that 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.