News Flash: 5 Analysts Think Nancal Technology Co.,Ltd (SHSE:603859) Earnings Are Under Threat

Today is shaping up negative for Nancal Technology Co.,Ltd (SHSE:603859) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. The stock price has risen 5.1% to CN¥35.46 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After this downgrade, Nancal TechnologyLtd's five analysts are now forecasting revenues of CN¥1.8b in 2024. This would be a decent 19% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 34% to CN¥1.89. Before this latest update, the analysts had been forecasting revenues of CN¥2.0b and earnings per share (EPS) of CN¥2.11 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

See our latest analysis for Nancal TechnologyLtd

The consensus price target fell 14% to CN¥46.98, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Nancal TechnologyLtd's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 19% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 17% per year. So although Nancal TechnologyLtd is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Nancal TechnologyLtd analysts - going out to 2026, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.