Need To Know: Analysts Just Made A Substantial Cut To Their Zhejiang Huangma Technology Co.,Ltd (SHSE:603181) Estimates

Market forces rained on the parade of Zhejiang Huangma Technology Co.,Ltd (SHSE:603181) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After the downgrade, the three analysts covering Zhejiang Huangma TechnologyLtd are now predicting revenues of CN¥2.3b in 2024. If met, this would reflect a huge 24% improvement in sales compared to the last 12 months. Per-share earnings are expected to grow 15% to CN¥0.66. Previously, the analysts had been modelling revenues of CN¥3.2b and earnings per share (EPS) of CN¥0.78 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a real cut to earnings per share numbers as well.

See our latest analysis for Zhejiang Huangma TechnologyLtd

Despite the cuts to forecast earnings, there was no real change to the CN¥12.46 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

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 Zhejiang Huangma TechnologyLtd's growth to accelerate, with the forecast 24% annualised growth to the end of 2024 ranking favourably alongside historical growth of 3.5% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhejiang Huangma TechnologyLtd is expected to grow much faster than its 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will 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 Zhejiang Huangma TechnologyLtd.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Zhejiang Huangma TechnologyLtd analysts - 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.