Earnings Miss: Stella International Holdings Limited Missed EPS By 16% And Analysts Are Revising Their Forecasts
Shareholders might have noticed that Stella International Holdings Limited (HKG:1836) filed its half-year result this time last week. The early response was not positive, with shares down 6.9% to HK$13.15 in the past week. It was not a great result overall. While revenues of US$787m were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 16% to hit US$0.076 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Taking into account the latest results, Stella International Holdings' seven analysts currently expect revenues in 2026 to be US$1.57b, approximately in line with the last 12 months. Statutory per share are forecast to be US$0.15, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of US$1.57b and earnings per share (EPS) of US$0.17 in 2026. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.
Check out our latest analysis for Stella International Holdings
The consensus price target held steady at HK$14.35, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Stella International Holdings at HK$18.02 per share, while the most bearish prices it at HK$10.00. 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.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Stella International Holdings' past performance and to peers in the same industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.9% by the end of 2026. This indicates a significant reduction from annual growth of 0.7% 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 7.1% annually for the foreseeable future. It's pretty clear that Stella International Holdings' revenues are expected to perform substantially worse than 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 Stella International Holdings. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Stella International Holdings' revenue is expected to perform worse than the wider industry. 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. We have estimates - from multiple Stella International Holdings analysts - going out to 2028, and you can see them free on our platform here.
However, before you get too enthused, we've discovered 1 warning sign for Stella International Holdings that you should be aware of.
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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.