It's been a good week for Stella International Holdings Limited (HKG:1836) shareholders, because the company has just released its latest full-year results, and the shares gained 4.6% to HK$12.40. The result was positive overall - although revenues of US$1.5b were in line with what the analysts predicted, Stella International Holdings surprised by delivering a statutory profit of US$0.18 per share, modestly greater than expected. 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 current consensus from Stella International Holdings' seven analysts is for revenues of US$1.53b in 2024. This would reflect a reasonable 2.4% increase on its revenue over the past 12 months. Per-share earnings are expected to climb 15% to US$0.20. In the lead-up to this report, the analysts had been modelling revenues of US$1.58b and earnings per share (EPS) of US$0.18 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a substantial gain in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

There's been no real change to the average price target of HK$13.91, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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. There are some variant perceptions on Stella International Holdings, with the most bullish analyst valuing it at HK$15.60 and the most bearish at HK$11.70 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

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 analysts are definitely expecting Stella International Holdings' growth to accelerate, with the forecast 2.4% annualised growth to the end of 2024 ranking favourably alongside historical growth of 1.0% 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 9.8% per year. So it's clear that despite the acceleration in growth, Stella International Holdings is expected to grow meaningfully slower than the industry average.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Stella International Holdings' 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. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target held steady at HK$13.91, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Stella International Holdings going out to 2026, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Stella International Holdings you should know about.

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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.