It's been a good week for Yonyou Network Technology Co.,Ltd. (SHSE:600588) shareholders, because the company has just released its latest first-quarter results, and the shares gained 4.7% to CN¥11.64. Results overall were mixed; even though revenues of CN¥1.7b beat expectations by 14%, statutory losses were CN¥0.14 per share, 20% larger than what the analysts had forecast. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the most recent consensus for Yonyou Network TechnologyLtd from 25 analysts is for revenues of CN¥11.1b in 2024. If met, it would imply a solid 10% increase on its revenue over the past 12 months. Yonyou Network TechnologyLtd is also expected to turn profitable, with statutory earnings of CN¥0.094 per share. In the lead-up to this report, the analysts had been modelling revenues of CN¥11.1b and earnings per share (EPS) of CN¥0.082 in 2024. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at CN¥15.59, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Yonyou Network TechnologyLtd, with the most bullish analyst valuing it at CN¥21.00 and the most bearish at CN¥9.18 per share. 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.

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. It's clear from the latest estimates that Yonyou Network TechnologyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.3% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 22% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Yonyou Network TechnologyLtd is expected to grow slower 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 Yonyou Network TechnologyLtd following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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 Yonyou Network TechnologyLtd going out to 2026, and you can see them free on our platform here..

It might also be worth considering whether Yonyou Network TechnologyLtd's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.