It's shaping up to be a tough period for Shandong Sinocera Functional Material Co., Ltd. (SZSE:300285), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. Results showed a clear earnings miss, with CN¥1.0b revenue coming in 9.1% lower than what the analystsexpected. Statutory earnings per share (EPS) of CN¥0.15 missed the mark badly, arriving some 23% 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the latest results, Shandong Sinocera Functional Material's 13 analysts are now forecasting revenues of CN¥5.16b in 2025. This would be a major 28% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 49% to CN¥0.91. Before this earnings report, the analysts had been forecasting revenues of CN¥5.24b and earnings per share (EPS) of CN¥0.93 in 2025. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

The consensus price target held steady at CN¥24.51, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Shandong Sinocera Functional Material analyst has a price target of CN¥26.50 per share, while the most pessimistic values it at CN¥21.75. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Shandong Sinocera Functional Material's growth to accelerate, with the forecast 22% annualised growth to the end of 2025 ranking favourably alongside historical growth of 13% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 15% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Shandong Sinocera Functional Material is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Shandong Sinocera Functional Material. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at CN¥24.51, 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 Shandong Sinocera Functional Material going out to 2026, and you can see them free on our platform here.

It might also be worth considering whether Shandong Sinocera Functional Material's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.

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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.