Some Hithink RoyalFlush Information Network Co., Ltd. (SZSE:300033) Analysts Just Made A Major Cut To Next Year's Estimates

Today is shaping up negative for Hithink RoyalFlush Information Network Co., Ltd. (SZSE:300033) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. The stock price has risen 8.1% to CN¥141 over the past week. 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 current consensus from Hithink RoyalFlush Information Network's 13 analysts is for revenues of CN¥4.1b in 2024 which - if met - would reflect a meaningful 14% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 30% to CN¥3.40. Prior to this update, the analysts had been forecasting revenues of CN¥4.6b and earnings per share (EPS) of CN¥3.87 in 2024. Indeed, we can see that the analysts are a lot more bearish about Hithink RoyalFlush Information Network's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Hithink RoyalFlush Information Network

The consensus price target fell 7.6% to CN¥163, with the weaker earnings outlook clearly leading analyst valuation estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Hithink RoyalFlush Information Network's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 19% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 12% annually. So it's pretty clear that, while Hithink RoyalFlush Information Network's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Hithink RoyalFlush Information Network.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Hithink RoyalFlush Information Network going out to 2026, and you can see them 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.