These Analysts Just Made A Sizeable Downgrade To Their Joyoung Co.,Ltd (SZSE:002242) EPS Forecasts

One thing we could say about the analysts on Joyoung Co.,Ltd (SZSE:002242) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 JoyoungLtd's 16 analysts is for revenues of CN¥10b in 2024 which - if met - would reflect a modest 5.0% increase on its sales over the past 12 months. Per-share earnings are expected to soar 23% to CN¥0.63. Prior to this update, the analysts had been forecasting revenues of CN¥11b and earnings per share (EPS) of CN¥0.86 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.

See our latest analysis for JoyoungLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to CN¥12.37.

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. The analysts are definitely expecting JoyoungLtd's growth to accelerate, with the forecast 5.0% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.0% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 9.9% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, JoyoungLtd is expected to grow slower than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for JoyoungLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that JoyoungLtd's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of JoyoungLtd.

In light of the downgrade, our automated discounted cash flow valuation tool suggests that JoyoungLtd could now be moderately overvalued. You can learn more about our valuation methodology for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks 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.