Cowell e Holdings Inc. (HKG:1415) defied analyst predictions to release its yearly results, which were ahead of market expectations. Results were good overall, with revenues beating analyst predictions by 5.1% to hit US$543m. Statutory earnings per share (EPS) came in at US$0.035, some 2.9% above whatthe analyst had expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analyst is forecasting for next year, and see if there's been a change in sentiment towards the company. So we collected the latest post-earnings statutory consensus estimate to see what could be in store for next year.

See our latest analysis for Cowell e Holdings

Taking into account the latest results, the most recent consensus for Cowell e Holdings from sole analyst is for revenues of US$562.1m in 2020 which, if met, would be a reasonable 3.6% increase on its sales over the past 12 months. Statutory per share are forecast to be US$0.035, approximately in line with the last 12 months. Before this earnings report, the analyst had been forecasting revenues of US$527.2m and earnings per share (EPS) of US$0.039 in 2020. So it's pretty clear the analyst has mixed opinions on Cowell e Holdings after the latest results; even though they upped their revenue numbers, it came at the cost of a real cut to per-share earnings expectations.

Curiously, the consensus price target rose 5.6% to US$0.38. We can only conclude that the forecast revenue growth is expected to offset the impact of the expected fall in earnings.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cowell e Holdings's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Cowell e Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to grow 3.6%. If achieved, this would be a much better result than the 14% annual decline over the past five years. Compare this against analyst estimates for the wider industry, which suggest that (in aggregate) industry revenues are expected to grow 13% next year. Although Cowell e Holdings's revenues are expected to improve, it seems that the analyst is still bearish on the business, forecasting it to grow slower than the wider industry.

The Bottom Line

The biggest concern is that the analyst reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cowell e Holdings. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analyst believes the intrinsic value of the business is likely to improve over time.