Shareholders of VSTECS Holdings Limited (HKG:856) will be pleased this week, given that the stock price is up 10% to HK$6.80 following its latest annual results. It was a workmanlike result, with revenues of HK$89b coming in 9.2% ahead of expectations, and statutory earnings per share of HK$0.76, in line with analyst appraisals. 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.
Taking into account the latest results, the most recent consensus for VSTECS Holdings from five analysts is for revenues of HK$101.7b in 2025. If met, it would imply a notable 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 26% to HK$0.93. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$89.9b and earnings per share (EPS) of HK$0.85 in 2025. The analysts seem more optimistic after the latest results, with a solid increase in revenue and a modest lift to earnings per share estimates.
Check out our latest analysis for VSTECS Holdings
With these upgrades, we're not surprised to see that the analysts have lifted their price target 16% to HK$7.01per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on VSTECS Holdings, with the most bullish analyst valuing it at HK$8.18 and the most bearish at HK$5.40 per share. 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.
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. It's clear from the latest estimates that VSTECS Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 14% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.1% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 12% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that VSTECS Holdings is expected to grow at about the same rate as the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around VSTECS Holdings' earnings potential next year. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple VSTECS Holdings analysts - going out to 2027, and you can see them free on our platform here.
You still need to take note of risks, for example - VSTECS Holdings has 3 warning signs (and 2 which are concerning) we think you should know about.
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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.