Analysts Just Slashed Their SBT Ultrasonic Technology Co.,Ltd. (SHSE:688392) EPS Numbers

Today is shaping up negative for SBT Ultrasonic Technology Co.,Ltd. (SHSE:688392) 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 analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. Investors however, have been notably more optimistic about SBT Ultrasonic TechnologyLtd recently, with the stock price up a remarkable 12% to CN¥34.40 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

After the downgrade, the three analysts covering SBT Ultrasonic TechnologyLtd are now predicting revenues of CN¥551m in 2024. If met, this would reflect a major 31% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 688% to CN¥0.63. Previously, the analysts had been modelling revenues of CN¥653m and earnings per share (EPS) of CN¥0.79 in 2024. Indeed, we can see that the analysts are a lot more bearish about SBT Ultrasonic TechnologyLtd's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for SBT Ultrasonic TechnologyLtd

The consensus price target fell 12% to CN¥56.67, with the weaker earnings outlook clearly leading analyst valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that SBT Ultrasonic TechnologyLtd is forecast to grow faster in the future than it has in the past, with revenues expected to display 71% annualised growth until the end of 2024. If achieved, this would be a much better result than the 33% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 16% per year. Not only are SBT Ultrasonic TechnologyLtd's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of SBT Ultrasonic TechnologyLtd.

There might be good reason for analyst bearishness towards SBT Ultrasonic TechnologyLtd, like its declining profit margins. For more information, you can click here to discover this and the 1 other flag we've identified.

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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.