The analysts might have been a bit too bullish on Jason Furniture (Hangzhou) Co.,Ltd. (SHSE:603816), given that the company fell short of expectations when it released its quarterly results last week. It wasn't a great result overall - while revenue fell marginally short of analyst estimates at CN¥4.9b, statutory earnings missed forecasts by 17%, coming in at just CN¥0.56 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the 16 analysts covering Jason Furniture (Hangzhou)Ltd are now predicting revenues of CN¥20.9b in 2025. If met, this would reflect a notable 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 17% to CN¥2.69. In the lead-up to this report, the analysts had been modelling revenues of CN¥21.5b and earnings per share (EPS) of CN¥2.75 in 2025. 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.
What's most unexpected is that the consensus price target rose 13% to CN¥35.57, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip. 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. The most optimistic Jason Furniture (Hangzhou)Ltd analyst has a price target of CN¥43.18 per share, while the most pessimistic values it at CN¥25.90. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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. It's pretty clear that there is an expectation that Jason Furniture (Hangzhou)Ltd's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 8.5% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 8.1% annually. Factoring in the forecast slowdown in growth, it looks like Jason Furniture (Hangzhou)Ltd is forecast to grow at about the same rate as the wider industry.
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. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that in mind, we wouldn't be too quick to come to a conclusion on Jason Furniture (Hangzhou)Ltd. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Jason Furniture (Hangzhou)Ltd going out to 2026, and you can see them free on our platform here..
It is also worth noting that we have found 1 warning sign for Jason Furniture (Hangzhou)Ltd that you need to take into consideration.
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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.
