The Consensus EPS Estimates For Pony Testing Co., Ltd. (SZSE:300887) Just Fell Dramatically

Today is shaping up negative for Pony Testing Co., Ltd. (SZSE:300887) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Pony Testing's seven analysts is for revenues of CN¥2.8b in 2024 which - if met - would reflect a major 24% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 54,390% to CN¥0.54. Previously, the analysts had been modelling revenues of CN¥3.2b and earnings per share (EPS) of CN¥0.72 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Pony Testing

Analysts made no major changes to their price target of CN¥12.39, suggesting the downgrades are not expected to have a long-term impact on Pony Testing's valuation.

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. The analysts are definitely expecting Pony Testing's growth to accelerate, with the forecast 33% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 6.3% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Pony Testing 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Pony Testing.

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 Pony Testing's financials, such as its declining profit margins. For more information, you can click here to discover this and the 2 other concerns 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.