Party Time: Brokers Just Made Major Increases To Their Cambricon Technologies Corporation Limited (SHSE:688256) Earnings Forecasts

Celebrations may be in order for Cambricon Technologies Corporation Limited (SHSE:688256) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the most recent consensus for Cambricon Technologies from its four analysts is for revenues of CN¥1.4b in 2024 which, if met, would be a substantial 101% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 30% to CN¥1.42. However, before this estimates update, the consensus had been expecting revenues of CN¥956m and CN¥1.69 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.

See our latest analysis for Cambricon Technologies

The consensus price target rose 11% to CN¥127, with the analysts encouraged by the higher revenue and lower forecast losses for this year.

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. It's clear from the latest estimates that Cambricon Technologies' rate of growth is expected to accelerate meaningfully, with the forecast 101% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 20% p.a. 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 23% per year. 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. With a serious upgrade to expectations and a rising price target, it might be time to take another look at Cambricon Technologies.

It's great to see the analysts upgrading their estimates, but the biggest highlight to us is that the business is expected to become profitable in the foreseeable future. For more information, you can click through to our free platform to learn more about these forecasts.

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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.