Some Beijing Sanlian Hope Shin-Gosen Technical Service Co., Ltd. (SZSE:300384) Analysts Just Made A Major Cut To Next Year's Estimates

The analysts covering Beijing Sanlian Hope Shin-Gosen Technical Service Co., Ltd. (SZSE:300384) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. At CN¥14.68, shares are up 6.8% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the latest consensus from Beijing Sanlian Hope Shin-Gosen Technical Service's four analysts is for revenues of CN¥1.4b in 2024, which would reflect a solid 8.8% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to ascend 11% to CN¥1.05. Prior to this update, the analysts had been forecasting revenues of CN¥1.6b and earnings per share (EPS) of CN¥1.19 in 2024. Indeed, we can see that the analysts are a lot more bearish about Beijing Sanlian Hope Shin-Gosen Technical Service's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Beijing Sanlian Hope Shin-Gosen Technical Service

It'll come as no surprise then, to learn that the analysts have cut their price target 5.4% to CN¥18.43.

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 Beijing Sanlian Hope Shin-Gosen Technical Service'shistorical trends, as the 8.8% 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 (in aggregate), which analyst estimates suggest will see revenues grow 20% annually. So although Beijing Sanlian Hope Shin-Gosen Technical Service is expected to maintain its revenue growth rate, it's forecast to grow slower 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Beijing Sanlian Hope Shin-Gosen Technical Service's revenues are expected to grow slower 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. We have estimates - from multiple Beijing Sanlian Hope Shin-Gosen Technical Service 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.