Wasion Holdings Limited (HKG:3393) Consensus Forecasts Have Become A Little Darker Since Its Latest Report
Wasion Holdings Limited (HKG:3393) shareholders are probably feeling a little disappointed, since its shares fell 5.2% to HK$2.56 in the week after its latest full-year results. The result was fairly weak overall, with revenues of CN¥3.7b being 5.3% less than what the analysts had been modelling. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Wasion Holdings after the latest results.
See our latest analysis for Wasion Holdings
Taking into account the latest results, the consensus forecast from Wasion Holdings' four analysts is for revenues of CN¥4.04b in 2020, which would reflect a notable 11% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to accumulate 5.8% to CN¥0.30. Before this earnings report, the analysts had been forecasting revenues of CN¥4.45b and earnings per share (EPS) of CN¥0.39 in 2020. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.
The consensus price target fell 17% to CN¥3.49, with the weaker earnings outlook clearly leading valuation estimates. 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 Wasion Holdings analyst has a price target of CN¥4.23 per share, while the most pessimistic values it at CN¥3.20. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
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. The analysts are definitely expecting Wasion Holdings'growth to accelerate, with the forecast 11% growth ranking favourably alongside historical growth of 5.0% per annum over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 12% per year. Wasion Holdings is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
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. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Wasion Holdings' future valuation.
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 Wasion Holdings going out to 2022, and you can see them free on our platform here..
Before you take the next step you should know about the 3 warning signs for Wasion Holdings (1 doesn't sit too well with us!) that we have uncovered.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
