Yahoo Finance Earnings Miss: AAC Technologies Holdings Inc. Missed EPS By 15% And Analysts Are Revising Their Forecasts
The quarterly results for AAC Technologies Holdings Inc. (HKG:2018) were released last week, making it a good time to revisit its performance. It was not a great result overall. Although revenues beat expectations, hitting CN¥3.6b, statutory earnings missed analyst forecasts by 15%, coming in at just CN¥0.04 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for AAC Technologies Holdings
After the latest results, the 26 analysts covering AAC Technologies Holdings are now predicting revenues of CN¥19.1b in 2020. If met, this would reflect a solid 8.1% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to expand 16% to CN¥1.77. In the lead-up to this report, the analysts had been modelling revenues of CN¥19.4b and earnings per share (EPS) of CN¥1.67 in 2020. So the consensus seems to have become somewhat more optimistic on AAC Technologies Holdings' earnings potential following these results.
The consensus price target was unchanged at CN¥42.22, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic AAC Technologies Holdings analyst has a price target of CN¥66.13 per share, while the most pessimistic values it at CN¥25.18. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that AAC Technologies Holdings' revenue growth is expected to slow, with forecast 8.1% increase next year well below the historical 12%p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than AAC Technologies Holdings.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around AAC Technologies Holdings' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that AAC Technologies Holdings' revenues are expected to perform worse than the wider industry. The consensus price target held steady at CN¥42.22, with the latest estimates not enough to have an impact on their price targets.
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 AAC Technologies 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 AAC Technologies Holdings that we have uncovered.
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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. 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. Thank you for reading.