Some Shenzhen Senior Technology Material Co., Ltd. (SZSE:300568) Analysts Just Made A Major Cut To Next Year's Estimates

The latest analyst coverage could presage a bad day for Shenzhen Senior Technology Material Co., Ltd. (SZSE:300568), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the eleven analysts covering Shenzhen Senior Technology Material are now predicting revenues of CN¥4.2b in 2024. If met, this would reflect a major 38% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to jump 79% to CN¥0.66. Previously, the analysts had been modelling revenues of CN¥5.1b and earnings per share (EPS) of CN¥0.99 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shenzhen Senior Technology Material's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Shenzhen Senior Technology Material

The consensus price target fell 9.0% to CN¥16.40, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Shenzhen Senior Technology Material's growth to accelerate, with the forecast 54% annualised growth to the end of 2024 ranking favourably alongside historical growth of 36% 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 Shenzhen Senior Technology Material is expected to grow much faster than its industry.

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 Shenzhen Senior Technology Material. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Shenzhen Senior Technology Material.

That said, the analysts might have good reason to be negative on Shenzhen Senior Technology Material, given concerns around earnings quality. For more information, you can click here to discover this and the 3 other risks 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 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.