Shareholders might have noticed that Vesync Co., Ltd (HKG:2148) filed its half-yearly result this time last week. The early response was not positive, with shares down 5.9% to HK$3.99 in the past week. Revenues came in 6.9% below expectations, at US$296m. Statutory earnings per share were relatively better off, with a per-share profit of US$0.069 being roughly in line with analyst estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. 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 Vesync from seven analysts is for revenues of US$666.8m in 2024. If met, it would imply a meaningful 10% increase on its revenue over the past 12 months. Statutory per-share earnings are expected to be US$0.08, roughly flat on the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$697.1m and earnings per share (EPS) of US$0.073 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a nice increase 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$6.44, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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 Vesync at HK$6.80 per share, while the most bearish prices it at HK$5.62. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Vesync's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.5% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Vesync to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Vesync's earnings potential next year. They also downgraded Vesync's revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Still, earnings are more important to the intrinsic value of the business. The consensus price target held steady at HK$6.44, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Vesync. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Vesync analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for Vesync that you need to take into consideration.

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