The analysts might have been a bit too bullish on iRay Technology Company Limited (SHSE:688301), given that the company fell short of expectations when it released its annual results last week. iRay Technology missed earnings this time around, with CN¥1.9b revenue coming in 4.9% below what the analysts had modelled. Statutory earnings per share (EPS) of CN¥5.75 also fell short of expectations by 12%. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
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Taking into account the latest results, the current consensus from iRay Technology's nine analysts is for revenues of CN¥2.29b in 2024. This would reflect a substantial 23% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 36% to CN¥8.09. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥2.39b and earnings per share (EPS) of CN¥7.76 in 2024. If anything, the analysts look to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
There's been no real change to the average price target of CN¥304, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. 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 iRay Technology analyst has a price target of CN¥354 per share, while the most pessimistic values it at CN¥247. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 23% growth on an annualised basis. That is in line with its 28% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 19% annually. It's clear that while iRay Technology's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around iRay Technology's earnings potential next year. 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. Still, earnings are more important to the intrinsic value of the business. 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 iRay Technology going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for iRay Technology (1 can't be ignored!) that we have uncovered.
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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.
