Leader Harmonious Drive Systems Co., Ltd. (SHSE:688017) just released its latest third-quarter results and things are looking bullish. It was a solid earnings report, with revenues and statutory earnings per share (EPS) both coming in strong. Revenues were 15% higher than the analysts had forecast, at CN¥104m, while EPS were CN¥0.13 beating analyst models by 24%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Following the latest results, Leader Harmonious Drive Systems' eleven analysts are now forecasting revenues of CN¥538.1m in 2025. This would be a major 42% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 84% to CN¥0.77. In the lead-up to this report, the analysts had been modelling revenues of CN¥567.0m and earnings per share (EPS) of CN¥0.84 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.

The average price target climbed 11% to CN¥65.00despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. 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 Leader Harmonious Drive Systems analyst has a price target of CN¥111 per share, while the most pessimistic values it at CN¥30.00. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. 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.

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. The analysts are definitely expecting Leader Harmonious Drive Systems' growth to accelerate, with the forecast 33% 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 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Leader Harmonious Drive Systems to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Leader Harmonious Drive Systems. They also downgraded Leader Harmonious Drive Systems' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Leader Harmonious Drive Systems going out to 2026, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for Leader Harmonious Drive Systems you should be aware of, and 1 of them can't be ignored.

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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.