CIFI Holdings (Group) Co. Ltd. Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now
Shareholders of CIFI Holdings (Group) Co. Ltd. (HKG:884) will be pleased this week, given that the stock price is up 19% to HK$5.60 following its latest full-year results. It looks like the results were a bit of a negative overall. While revenues of CN¥55b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 8.1% to hit CN¥0.81 per share. 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 CIFI Holdings (Group) after the latest results.
Check out our latest analysis for CIFI Holdings (Group)
After the latest results, the 20 analysts covering CIFI Holdings (Group) are now predicting revenues of CN¥70.0b in 2020. If met, this would reflect a sizeable 28% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 27% to CN¥1.04. Before this earnings report, the analysts had been forecasting revenues of CN¥71.3b and earnings per share (EPS) of CN¥1.09 in 2020. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at CN¥6.97, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values CIFI Holdings (Group) at CN¥8.67 per share, while the most bearish prices it at CN¥5.68. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
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 CIFI Holdings (Group)'shistorical trends, as next year's 28% revenue growth is roughly in line with 26% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 15% per year. So although CIFI Holdings (Group) is expected to maintain its revenue growth rate, it's definitely expected 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 CIFI Holdings (Group). Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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.
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. At Simply Wall St, we have a full range of analyst estimates for CIFI Holdings (Group) going out to 2022, 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 3 warning signs with CIFI Holdings (Group) (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.
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.
