Analyst Forecasts Just Became More Bearish On Zhejiang Communications Technology Co., Ltd. (SZSE:002061)

One thing we could say about the analysts on Zhejiang Communications Technology Co., Ltd. (SZSE:002061) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the latest consensus from Zhejiang Communications Technology's two analysts is for revenues of CN¥51b in 2024, which would reflect a notable 10% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to step up 11% to CN¥0.59. Before this latest update, the analysts had been forecasting revenues of CN¥59b and earnings per share (EPS) of CN¥0.65 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a small dip in EPS estimates to boot.

View our latest analysis for Zhejiang Communications Technology

Analysts made no major changes to their price target of CN¥4.70, suggesting the downgrades are not expected to have a long-term impact on Zhejiang Communications Technology's valuation.

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. We can infer from the latest estimates that forecasts expect a continuation of Zhejiang Communications Technology'shistorical trends, as the 10% annualised revenue growth to the end of 2024 is roughly in line with the 11% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 10% annually. So although Zhejiang Communications Technology is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Zhejiang Communications Technology. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Zhejiang Communications Technology after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2026, which can be seen for 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 backed by insiders.

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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.