These Analysts Just Made A Substantial Downgrade To Their Jinlei Technology Co., Ltd. (SZSE:300443) EPS Forecasts

Market forces rained on the parade of Jinlei Technology Co., Ltd. (SZSE:300443) shareholders today, when the analysts downgraded their forecasts for this year. 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.

Following the downgrade, the current consensus from Jinlei Technology's five analysts is for revenues of CN¥2.2b in 2024 which - if met - would reflect a notable 18% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 22% to CN¥1.08. Prior to this update, the analysts had been forecasting revenues of CN¥2.6b and earnings per share (EPS) of CN¥1.54 in 2024. Indeed, we can see that the analysts are a lot more bearish about Jinlei Technology's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Jinlei Technology

The consensus price target fell 8.2% to CN¥20.70, with the weaker earnings outlook clearly leading analyst valuation estimates.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Jinlei Technology's rate of growth is expected to accelerate meaningfully, with the forecast 38% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Jinlei Technology 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. 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. At Simply Wall St, we have a full range of analyst estimates for Jinlei Technology 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 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.