HK$3.40: That's What Analysts Think Topsports International Holdings Limited (HKG:6110) Is Worth After Its Latest Results

One of the biggest stories of last week was how Topsports International Holdings Limited (HKG:6110) shares plunged 30% in the week since its latest yearly results, closing yesterday at HK$1.81. Topsports International Holdings reported in line with analyst predictions, delivering revenues of CN¥26b and statutory earnings per share of CN¥0.20, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the 16 analysts covering Topsports International Holdings provided consensus estimates of CN¥24.8b revenue in 2027, which would reflect a small 3.8% decline over the past 12 months. Statutory earnings per share are forecast to decrease 2.5% to CN¥0.20 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥25.1b and earnings per share (EPS) of CN¥0.20 in 2027. 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 Topsports International Holdings

The average price target fell 6.0% to HK$3.40, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values Topsports International Holdings at HK$4.99 per share, while the most bearish prices it at HK$2.20. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would also point out that the forecast 3.8% annualised revenue decline to the end of 2027 is better than the historical trend, which saw revenues shrink 6.5% annually over the past five years Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 9.3% annually. So while a broad number of companies are forecast to grow, unfortunately Topsports International Holdings is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Topsports 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 Topsports International Holdings' revenue is expected to perform worse than the wider industry. 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 estimates - from multiple Topsports International Holdings analysts - going out to 2029, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Topsports International Holdings that you need to take into consideration.

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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.