Forecast: Analysts Think Cambricon Technologies Corporation Limited's (SHSE:688256) Business Prospects Have Improved Drastically

Cambricon Technologies Corporation Limited (SHSE:688256) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 5.8% to CN¥171 over the past week, suggesting investors are becoming more optimistic. It will be interesting to see if this latest upgrade is enough to kickstart further buying interest in the stock.

After the upgrade, the five analysts covering Cambricon Technologies are now predicting revenues of CN¥1.7b in 2024. If met, this would reflect a huge 158% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 39% to CN¥1.19 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of CN¥1.4b and losses of CN¥1.37 per share in 2024. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Cambricon Technologies

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Cambricon Technologies' growth to accelerate, with the forecast 254% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.3% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Cambricon Technologies is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for this year, reflecting increased optimism around Cambricon Technologies' prospects. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The clear improvement in sentiment should be enough to get most shareholders feeling more optimistic about Cambricon Technologies' future.

That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect Cambricon Technologies to be able to reach break-even within the next few years. You can learn more about these forecasts, 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 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.