Last week, you might have seen that Kingsoft Corporation Limited (HKG:3888) released its quarterly result to the market. The early response was not positive, with shares down 7.1% to HK$24.56 in the past week. Revenues were CN¥2.5b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at CN¥0.40, an impressive 48% ahead of estimates. Following the result, the 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 gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, Kingsoft's eight analysts currently expect revenues in 2026 to be CN¥10.1b, approximately in line with the last 12 months. Statutory earnings per share are forecast to tumble 30% to CN¥1.47 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥10.4b and earnings per share (EPS) of CN¥1.25 in 2026. While revenue forecasts have been revised downwards, the analysts look to have become more optimistic on the company's cost base, given the nice gain to to the earnings per share numbers.
Check out our latest analysis for Kingsoft
There's been no real change to the average price target of HK$32.18, with the lower revenue and higher earnings forecasts not expected to meaningfully impact the company's valuation over a longer timeframe. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Kingsoft at HK$51.51 per share, while the most bearish prices it at HK$24.77. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Kingsoft's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 3.5% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.6% per year. Factoring in the forecast slowdown in growth, it seems obvious that Kingsoft is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kingsoft following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Even so, earnings per share are more important to the intrinsic value of the business. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
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 Kingsoft going out to 2028, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Kingsoft (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.
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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.