Shenzhen Envicool Technology Co., Ltd. (SZSE:002837) defied analyst predictions to release its quarterly results, which were ahead of market expectations. It was overall a positive result, with revenues beating expectations by 7.5% to hit CN¥1.2b. Shenzhen Envicool Technology also reported a statutory profit of CN¥0.23, which was an impressive 28% above 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the most recent consensus for Shenzhen Envicool Technology from 16 analysts is for revenues of CN¥6.36b in 2025. If met, it would imply a substantial 47% increase on its revenue over the past 12 months. Per-share earnings are expected to jump 51% to CN¥0.99. Before this earnings report, the analysts had been forecasting revenues of CN¥6.25b and earnings per share (EPS) of CN¥0.98 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 12% to CN¥31.56. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Shenzhen Envicool Technology analyst has a price target of CN¥40.21 per share, while the most pessimistic values it at CN¥23.85. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Shenzhen Envicool Technology shareholders.
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 clear from the latest estimates that Shenzhen Envicool Technology's rate of growth is expected to accelerate meaningfully, with the forecast 36% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 24% p.a. 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 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Shenzhen Envicool Technology to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Shenzhen Envicool Technology going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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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.
