Bearish: Analysts Just Cut Their Beijing GeoEnviron Engineering & Technology, Inc. (SHSE:603588) Revenue and EPS estimates

The latest analyst coverage could presage a bad day for Beijing GeoEnviron Engineering & Technology, Inc. (SHSE:603588), 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) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the most recent consensus for Beijing GeoEnviron Engineering & Technology from its four analysts is for revenues of CN¥16b in 2025 which, if met, would be a reasonable 6.9% increase on its sales over the past 12 months. Per-share earnings are expected to soar 26% to CN¥0.40. Prior to this update, the analysts had been forecasting revenues of CN¥17b and earnings per share (EPS) of CN¥0.61 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Beijing GeoEnviron Engineering & Technology

What's most unexpected is that the consensus price target rose 9.8% to CN¥7.78, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Beijing GeoEnviron Engineering & Technology's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 6.9% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% per year. Factoring in the forecast slowdown in growth, it seems obvious that Beijing GeoEnviron Engineering & Technology is also expected to grow slower than other industry participants.

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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Beijing GeoEnviron Engineering & Technology's revenues are expected to grow slower than the wider market. The increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Beijing GeoEnviron Engineering & Technology's financials, such as the risk of cutting its dividend. For more information, you can click here to discover this and the 1 other flag we've identified.

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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.