Earnings Miss: Xiamen R&T Plumbing Technology Co.,Ltd. Missed EPS By 12% And Analysts Are Revising Their Forecasts

As you might know, Xiamen R&T Plumbing Technology Co.,Ltd. (SZSE:002790) last week released its latest yearly, and things did not turn out so great for shareholders. Xiamen R&T Plumbing TechnologyLtd missed earnings this time around, with CN¥2.2b revenue coming in 3.0% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥0.52 also fell short of expectations by 12%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Xiamen R&T Plumbing TechnologyLtd

SZSE:002790 Earnings and Revenue Growth April 26th 2024

Following the latest results, Xiamen R&T Plumbing TechnologyLtd’s six analysts are now forecasting revenues of CN¥2.61b in 2024. This would be a solid 20% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to leap 27% to CN¥0.66. Before this earnings report, the analysts had been forecasting revenues of CN¥2.60b and earnings per share (EPS) of CN¥0.67 in 2024. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.

The analysts reconfirmed their price target of CN¥13.17, showing that the business is executing well and in line with expectations. 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. The most optimistic Xiamen R&T Plumbing TechnologyLtd analyst has a price target of CN¥13.27 per share, while the most pessimistic values it at CN¥13.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Xiamen R&T Plumbing TechnologyLtd is an easy business to forecast or the the analysts are all using similar assumptions.

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. We can infer from the latest estimates that forecasts expect a continuation of Xiamen R&T Plumbing TechnologyLtd’shistorical trends, as the 20% annualised revenue growth to the end of 2024 is roughly in line with the 18% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 15% annually. So although Xiamen R&T Plumbing TechnologyLtd is expected to maintain its revenue growth rate, it’s definitely expected to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion is that there’s been no major change in the business’ prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at CN¥13.17, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple Xiamen R&T Plumbing TechnologyLtd analysts – going out to 2026, and you can see them free on our platform here.

That said, it’s still necessary to consider the ever-present spectre of investment risk. We’ve identified 1 warning sign with Xiamen R&T Plumbing TechnologyLtd , and understanding it should be part of your investment process.

Valuation is complex, but we’re helping make it simple.

Find out whether Xiamen R&T Plumbing TechnologyLtd is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.