Zhuzhou CRRC Times Electric Co., Ltd. Just Missed Earnings And Its Revenue Numbers Were Weaker Than Expected

Zhuzhou CRRC Times Electric Co., Ltd. (HKG:3898) just released its latest second-quarter report and things are not looking great. Zhuzhou CRRC Times Electric missed analyst forecasts, with revenues of CN¥8.0b and statutory earnings per share (EPS) of CN¥0.78, falling short by 6.0% and 3.7% respectively. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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After the latest results, the 15 analysts covering Zhuzhou CRRC Times Electric are now predicting revenues of CN¥31.7b in 2026. If met, this would reflect a modest 7.1% improvement in revenue compared to the last 12 months. Per-share earnings are expected to rise 3.2% to CN¥3.21. In the lead-up to this report, the analysts had been modelling revenues of CN¥32.2b and earnings per share (EPS) of CN¥3.33 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

See our latest analysis for Zhuzhou CRRC Times Electric

Despite cutting their earnings forecasts,the analysts have lifted their price target 5.3% to HK$47.41, suggesting that these impacts are not expected to weigh on the stock's value in the long term. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Zhuzhou CRRC Times Electric analyst has a price target of HK$80.10 per share, while the most pessimistic values it at HK$37.05. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of Zhuzhou CRRC Times Electric'shistorical trends, as the 15% annualised revenue growth to the end of 2026 is roughly in line with the 15% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 13% per year. So although Zhuzhou CRRC Times Electric is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate 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 in mind, we wouldn't be too quick to come to a conclusion on Zhuzhou CRRC Times Electric. Long-term earnings power is much more important than next year's profits. We have forecasts for Zhuzhou CRRC Times Electric going out to 2028, and you can see them free on our platform here.

Even so, be aware that Zhuzhou CRRC Times Electric is showing 1 warning sign in our investment analysis , 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.