News Flash: 2 Analysts Think YOOZOO Interactive Co., Ltd. (SZSE:002174) Earnings Are Under Threat

Today is shaping up negative for YOOZOO Interactive Co., Ltd. (SZSE:002174) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from YOOZOO Interactive's twin analysts is for revenues of CN¥1.7b in 2024, which would reflect a notable 17% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 305% to CN¥0.29. Before this latest update, the analysts had been forecasting revenues of CN¥2.1b and earnings per share (EPS) of CN¥0.33 in 2024. Indeed, we can see that the analysts are a lot more bearish about YOOZOO Interactive's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for YOOZOO Interactive

It'll come as no surprise then, to learn that the analysts have cut their price target 8.7% to CN¥7.85.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that YOOZOO Interactive's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 17% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 18% a year 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 revenue grow 14% per year. So while YOOZOO Interactive's revenues are expected to improve, it seems that it is expected to grow at about the same rate as the overall 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 YOOZOO Interactive. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of YOOZOO Interactive.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for 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 backed by insiders.

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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.

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