Things Look Grim For Guizhou Space Appliance Co., LTD (SZSE:002025) After Today's Downgrade

The latest analyst coverage could presage a bad day for Guizhou Space Appliance Co., LTD (SZSE:002025), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for Guizhou Space Appliance from its five analysts is for revenues of CN¥7.3b in 2024 which, if met, would be a decent 17% increase on its sales over the past 12 months. Per-share earnings are expected to leap 27% to CN¥2.09. Previously, the analysts had been modelling revenues of CN¥9.5b and earnings per share (EPS) of CN¥2.33 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a real cut to earnings per share numbers as well.

Check out our latest analysis for Guizhou Space Appliance

The consensus price target fell 5.9% to CN¥60.84, 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. We can infer from the latest estimates that forecasts expect a continuation of Guizhou Space Appliance'shistorical trends, as the 17% annualised revenue growth to the end of 2024 is roughly in line with the 17% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 21% annually. It's clear that while Guizhou Space Appliance's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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 Guizhou Space Appliance analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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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.