Time To Worry? Analysts Just Downgraded Their Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) Outlook

The latest analyst coverage could presage a bad day for Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

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After this downgrade, Kunshan Dongwei TechnologyLtd's three analysts are now forecasting revenues of CN¥1.6b in 2025. This would be a sizeable 108% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 493% to CN¥1.34. Prior to this update, the analysts had been forecasting revenues of CN¥2.0b and earnings per share (EPS) of CN¥1.36 in 2025. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a sizeable cut to revenues and reconfirming their earnings per share estimates.

See our latest analysis for Kunshan Dongwei TechnologyLtd

It will come as no surprise then, that the consensus price target fell 13% to CN¥26.77 following these changes.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that Kunshan Dongwei TechnologyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 108% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 10% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Kunshan Dongwei TechnologyLtd to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Kunshan Dongwei TechnologyLtd going forwards.

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 Kunshan Dongwei 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 with high insider ownership.

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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.