Investors in Baozun Inc. (NASDAQ:BZUN) had a good week, as its shares rose 2.6% to close at US$2.78 following the release of its first-quarter results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 4.6%to hit CN¥2.0b. 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. 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 Baozun's eleven analysts is for revenues of CN¥9.09b in 2024. This would reflect an okay 2.1% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 70% to CN¥1.31. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥9.13b and losses of CN¥2.73 per share in 2024. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very promising decrease in losses per share in particular.
There's been no major changes to the consensus price target of US$3.45, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's 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. The most optimistic Baozun analyst has a price target of US$4.94 per share, while the most pessimistic values it at US$2.49. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Baozun's revenue growth is expected to slow, with the forecast 2.8% annualised growth rate until the end of 2024 being well below the historical 5.5% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Baozun is also expected to grow slower than other industry participants.
The Bottom Line
The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$3.45, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Baozun going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Baozun has 1 warning sign we think 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.