The analysts might have been a bit too bullish on Chongqing Zhifei Biological Products Co., Ltd. (SZSE:300122), given that the company fell short of expectations when it released its quarterly results last week. Results showed a clear earnings miss, with CN¥11b revenue coming in 8.7% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.61 missed the mark badly, arriving some 35% below what was 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Taking into account the latest results, the most recent consensus for Chongqing Zhifei Biological Products from 14 analysts is for revenues of CN¥56.1b in 2024. If met, it would imply a modest 5.5% increase on its revenue over the past 12 months. Per-share earnings are expected to shoot up 45% to CN¥4.53. In the lead-up to this report, the analysts had been modelling revenues of CN¥59.7b and earnings per share (EPS) of CN¥4.66 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The consensus price target fell 9.0% to CN¥64.77, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Chongqing Zhifei Biological Products at CN¥95.88 per share, while the most bearish prices it at CN¥42.30. 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 Chongqing Zhifei Biological Products' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Chongqing Zhifei Biological Products' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.5% growth on an annualised basis. This is compared to a historical growth rate of 38% 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. Factoring in the forecast slowdown in growth, it seems obvious that Chongqing Zhifei Biological Products is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Chongqing Zhifei Biological Products' future valuation.

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 Chongqing Zhifei Biological Products going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 1 warning sign for Chongqing Zhifei Biological Products 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.