The analysts might have been a bit too bullish on Joyoung Co.,Ltd (SZSE:002242), given that the company fell short of expectations when it released its second-quarter results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥2.3b, statutory earnings missed forecasts by an incredible 66%, coming in at just CN¥0.06 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on JoyoungLtd after the latest results.
After the latest results, the ten analysts covering JoyoungLtd are now predicting revenues of CN¥9.90b in 2024. If met, this would reflect a reasonable 2.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 44% to CN¥0.60. In the lead-up to this report, the analysts had been modelling revenues of CN¥10.2b and earnings per share (EPS) of CN¥0.64 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.
The analysts made no major changes to their price target of CN¥12.13, suggesting the downgrades are not expected to have a long-term impact on JoyoungLtd's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on JoyoungLtd, with the most bullish analyst valuing it at CN¥17.00 and the most bearish at CN¥8.25 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that JoyoungLtd's rate of growth is expected to accelerate meaningfully, with the forecast 4.5% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.6% p.a. 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 8.6% per year. So it's clear that despite the acceleration in growth, JoyoungLtd is expected to grow meaningfully slower than the industry average.
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. 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple JoyoungLtd analysts - going out to 2026, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with JoyoungLtd .
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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.