Xingye Leather Technology Co., Ltd. (SZSE:002674) Analysts Just Cut Their EPS Forecasts Substantially

The analysts covering Xingye Leather Technology Co., Ltd. (SZSE:002674) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. 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 current consensus from Xingye Leather Technology's twin analysts is for revenues of CN¥2.9b in 2024 which - if met - would reflect an okay 6.3% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 32% to CN¥0.68. Before this latest update, the analysts had been forecasting revenues of CN¥3.3b and earnings per share (EPS) of CN¥0.91 in 2024. Indeed, we can see that the analysts are a lot more bearish about Xingye Leather Technology's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Xingye Leather Technology

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 would highlight that Xingye Leather Technology's revenue growth is expected to slow, with the forecast 6.3% annualised growth rate until the end of 2024 being well below the historical 14% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 13% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Xingye Leather Technology.

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 Xingye Leather Technology. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Xingye Leather Technology, and a few readers might choose to steer clear of the stock.

That said, the analysts might have good reason to be negative on Xingye Leather Technology, given the risk of cutting its dividend. For more information, you can click here to discover this and the 2 other concerns we've identified.

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 with high insider ownership.

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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.