Yahoo Finance The GDS Holdings Limited (NASDAQ:GDS) First-Quarter Results Are Out And Analysts Have Published New Forecasts
It's been a mediocre week for GDS Holdings Limited (NASDAQ:GDS) shareholders, with the stock dropping 19% to US$7.74 in the week since its latest first-quarter results. The statutory results were not great - while revenues of CN¥2.6b were in line with expectations,GDS Holdings lost CN¥1.96 a share in the process. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for GDS Holdings
Taking into account the latest results, the current consensus from GDS Holdings' 18 analysts is for revenues of CN¥11.3b in 2024. This would reflect a meaningful 11% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 61% to CN¥8.44. Before this latest report, the consensus had been expecting revenues of CN¥11.3b and CN¥9.01 per share in losses. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.
There's been no major changes to the consensus price target of US$15.69, suggesting that reduced loss estimates are not enough to have a long-term positive impact on the stock's valuation. 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. The most optimistic GDS Holdings analyst has a price target of US$29.00 per share, while the most pessimistic values it at US$7.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting GDS Holdings is an easy business to forecast or the the analysts are all using similar assumptions.
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. It's pretty clear that there is an expectation that GDS Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 15% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 9.2% per year. So it's pretty clear that, while GDS Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$15.69, with the latest estimates not enough to have an impact on their price targets.
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. At Simply Wall St, we have a full range of analyst estimates for GDS Holdings going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 3 warning signs for GDS Holdings that we have uncovered.
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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.
