What Does The Future Hold For Valiant Co.,Ltd (SZSE:002643)? These Analysts Have Been Cutting Their Estimates

The analysts covering Valiant Co.,Ltd (SZSE:002643) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

After the downgrade, the eight analysts covering ValiantLtd are now predicting revenues of CN¥4.7b in 2024. If met, this would reflect a meaningful 12% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 33% to CN¥0.98. Prior to this update, the analysts had been forecasting revenues of CN¥5.6b and earnings per share (EPS) of CN¥1.04 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.

Check out our latest analysis for ValiantLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 7.3% to CN¥19.14.

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. We can infer from the latest estimates that forecasts expect a continuation of ValiantLtd'shistorical trends, as the 12% annualised revenue growth to the end of 2024 is roughly in line with the 13% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 16% per year. So although ValiantLtd is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of ValiantLtd's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of ValiantLtd going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for ValiantLtd going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.