It's been a good week for Pylon Technologies Co., Ltd. (SHSE:688063) shareholders, because the company has just released its latest first-quarter results, and the shares gained 2.3% to CN¥48.42. Pylon Technologies reported a serious miss, with revenue of CN¥386m falling a huge 53% short of analyst estimates. The bright side is that statutory earnings per share of CN¥2.12 were in line with forecasts. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Taking into account the latest results, the consensus forecast from Pylon Technologies' seven analysts is for revenues of CN¥2.35b in 2024. This reflects a huge 41% improvement in revenue compared to the last 12 months. Pylon Technologies is also expected to turn profitable, with statutory earnings of CN¥0.55 per share. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.83b and earnings per share (EPS) of CN¥1.07 in 2024. Indeed, we can see that the analysts are a lot more bearish about Pylon Technologies' prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of CN¥51.68, suggesting the downgrades are not expected to have a long-term impact on Pylon Technologies' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Pylon Technologies at CN¥61.97 per share, while the most bearish prices it at CN¥41.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting Pylon Technologies' growth to accelerate, with the forecast 59% annualised growth to the end of 2024 ranking favourably alongside historical growth of 22% 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 17% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pylon Technologies to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Pylon Technologies. They also downgraded Pylon Technologies' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. The consensus price target held steady at CN¥51.68, with the latest estimates not enough to have an impact on their price targets.

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 Pylon Technologies going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Pylon Technologies 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.