The Consensus EPS Estimates For Beijing Balance Medical Technology Co.,Ltd. (SHSE:688198) Just Fell A Lot

Today is shaping up negative for Beijing Balance Medical Technology Co.,Ltd. (SHSE:688198) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, Beijing Balance Medical TechnologyLtd's solo analyst is now forecasting revenues of CN¥513m in 2024. This would be a major 34% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 44% to CN¥1.18. Prior to this update, the analyst had been forecasting revenues of CN¥571m and earnings per share (EPS) of CN¥1.35 in 2024. Indeed, we can see that the analyst is a lot more bearish about Beijing Balance Medical TechnologyLtd's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Beijing Balance Medical TechnologyLtd

It'll come as no surprise then, to learn that the analyst has cut their price target 8.0% to CN¥138.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Beijing Balance Medical TechnologyLtd's rate of growth is expected to accelerate meaningfully, with the forecast 34% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 18% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 20% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Beijing Balance Medical TechnologyLtd is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Beijing Balance Medical TechnologyLtd. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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.

After a downgrade like this one, it's pretty clear that previous forecasts were too optimistic. Worse, it's possible that the forecast future income could struggle to cover Beijing Balance Medical TechnologyLtd'sdividend payments. For more information, you can click here to learn more about our dividend analysis and the 1 potential warning sign 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.