Yahoo Finance US$4.18: That's What Analysts Think GreenTree Hospitality Group Ltd. (NYSE:GHG) Is Worth After Its Latest Results
Last week, you might have seen that GreenTree Hospitality Group Ltd. (NYSE:GHG) released its first-quarter result to the market. The early response was not positive, with shares down 5.3% to US$2.49 in the past week. It was a negative result overall, with revenues coming in 12% less than what the analyst expected, at CN¥352m. The analyst 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on GreenTree Hospitality Group after the latest results.
See our latest analysis for GreenTree Hospitality Group
Taking into account the latest results, GreenTree Hospitality Group's solitary analyst currently expect revenues in 2024 to be CN¥1.59b, approximately in line with the last 12 months. Per-share earnings are expected to jump 30% to CN¥3.75. Yet prior to the latest earnings, the analyst had been anticipated revenues of CN¥1.70b and earnings per share (EPS) of CN¥3.60 in 2024. If anything, the analyst looks to have become slightly more optimistic overall; while they decreased their revenue forecasts, EPS predictions increased and ultimately earnings are more important.
The consensus price target fell 5.7% to US$4.18, with the analyst signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts.
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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 1.1% by the end of 2024. This indicates a significant reduction from annual growth of 9.3% 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 9.8% annually for the foreseeable future. It's pretty clear that GreenTree Hospitality Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around GreenTree Hospitality Group's earnings potential next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Even so, long term profitability is more important for the value creation process. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of GreenTree Hospitality Group's future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for 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.
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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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
