Need To Know: Analysts Just Made A Substantial Cut To Their Hunan Zhongke Electric Co., Ltd. (SZSE:300035) Estimates

The latest analyst coverage could presage a bad day for Hunan Zhongke Electric Co., Ltd. (SZSE:300035), 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 analysts have soured majorly on the business. The stock price has risen 6.2% to CN¥8.02 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the current consensus from Hunan Zhongke Electric's four analysts is for revenues of CN¥5.2b in 2024 which - if met - would reflect a satisfactory 5.9% increase on its sales over the past 12 months. Per-share earnings are expected to rise 7.5% to CN¥0.37. Before this latest update, the analysts had been forecasting revenues of CN¥5.8b and earnings per share (EPS) of CN¥0.46 in 2024. Indeed, we can see that the analysts are a lot more bearish about Hunan Zhongke Electric's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Hunan Zhongke Electric

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hunan Zhongke Electric's past performance and to peers in the same industry. We would highlight that Hunan Zhongke Electric's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2024 being well below the historical 41% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 16% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Hunan Zhongke Electric.

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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on Hunan Zhongke Electric, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hunan Zhongke Electric analysts - going out to 2026, and you can see them free on our platform here.

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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.