Zhuzhou CRRC Times Electric Co., Ltd. (HKG:3898) Exceeded Expectations And The Analyst Consensus Has Been Reviewing Its Models
A week ago, Zhuzhou CRRC Times Electric Co., Ltd. (HKG:3898) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. The company beat expectations with revenues of CN¥7.7b arriving 5.9% ahead of forecasts. Statutory earnings per share (EPS) were CN¥0.83, 5.1% ahead of estimates. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Following the latest results, Zhuzhou CRRC Times Electric's 16 analysts are now forecasting revenues of CN¥35.1b in 2027. This would be a decent 14% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to expand 14% to CN¥3.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥35.2b and earnings per share (EPS) of CN¥3.58 in 2027. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
View our latest analysis for Zhuzhou CRRC Times Electric
It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$46.22. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Zhuzhou CRRC Times Electric analyst has a price target of HK$80.97 per share, while the most pessimistic values it at HK$35.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zhuzhou CRRC Times Electric's past performance and to peers in the same industry. We would highlight that Zhuzhou CRRC Times Electric's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2027 being well below the historical 15% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Zhuzhou CRRC Times Electric.
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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Zhuzhou CRRC Times Electric's revenue is expected to perform worse than the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Zhuzhou CRRC Times Electric. 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 Zhuzhou CRRC Times Electric going out to 2028, and you can see them free on our platform here..
Even so, be aware that Zhuzhou CRRC Times Electric is showing 1 warning sign in our investment analysis , you should know about...
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