Analysts Have Lowered Expectations For Kuaishou Technology (HKG:1024) After Its Latest Results

There's been a notable change in appetite for Kuaishou Technology (HKG:1024) shares in the week since its quarterly report, with the stock down 14% to HK$34.42. It was an okay report, and revenues came in at CN¥36b, approximately in line with analyst estimates leading up to the results announcement. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

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Taking into account the latest results, the current consensus, from the 31 analysts covering Kuaishou Technology, is for revenues of CN¥138.2b in 2026. This implies a perceptible 4.3% reduction in Kuaishou Technology's revenue over the past 12 months. Statutory earnings per share are expected to plummet 62% to CN¥1.38 in the same period. In the lead-up to this report, the analysts had been modelling revenues of CN¥147.8b and earnings per share (EPS) of CN¥3.06 in 2026. 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.

See our latest analysis for Kuaishou Technology

It'll come as no surprise then, to learn that the analysts have cut their price target 29% to HK$50.63. 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 Kuaishou Technology analyst has a price target of HK$102 per share, while the most pessimistic values it at HK$27.63. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 8.4% by the end of 2026. This indicates a significant reduction from annual growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.7% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kuaishou Technology is expected to lag 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 Kuaishou Technology. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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. We have forecasts for Kuaishou Technology going out to 2028, 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 Kuaishou Technology 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.