Last week, you might have seen that Tuniu Corporation (NASDAQ:TOUR) released its third-quarter result to the market. The early response was not positive, with shares down 6.4% to US$2.76 in the past week. Revenues of CN¥853m beat expectations by a respectable 7.3%, although losses per share increased. Tuniu lost CN¥1.50, which was 34% more than what analysts had included in their models. Following the result, 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 consensus estimates to see what could be in store for next year.
Taking into account the latest results, the current consensus from Tuniu's three analysts is for revenues of CN¥2.43b in 2020, which would reflect a modest 5.4% increase on its sales over the past 12 months. Per-share losses are expected to explode, reaching CN¥1.24 per share. Before this earnings announcement, analysts had been forecasting revenues of CN¥2.43b and losses of CN¥1.24 per share in 2020. Although the revenue estimates have not really changed, we can see there's been a earnings per share expectations, suggesting that analysts have become more bullish after the latest result.
The consensus price target was unchanged at CN¥25.25, suggesting that the business - losses and all - is executing in line with estimates. 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. Currently, the most bullish analyst values Tuniu at CN¥27.97 per share, while the most bearish prices it at CN¥25.01. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that analysts have a clear view on its prospects.
Further, we can compare these estimates to past performance, and see how Tuniu forecasts compare to the wider market's forecast performance. One thing stands out from these estimates, which is that analysts are forecasting Tuniu to grow faster in the future than it has in the past, with revenues expected to grow 5.4%. If achieved, this would be a much better result than the 18% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 7.1% per year. Although Tuniu's revenues are expected to improve, it seems that analysts are still bearish on the business, forecasting it to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Fortunately, analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Tuniu's revenues are expected to perform worse than the wider market. The consensus price target held steady at CN¥25.25, with the latest estimates not enough to have an impact on analysts' estimated valuations.
With that in mind, we wouldn't be too quick to come to a conclusion on Tuniu. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Tuniu going out to 2021, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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