These Analysts Just Made A Substantial Downgrade To Their Guobo Electronics Co., Ltd. (SHSE:688375) EPS Forecasts

The analysts covering Guobo Electronics Co., Ltd. (SHSE:688375) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. At CN¥77.15, shares are up 5.2% in the past 7 days. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

After this downgrade, Guobo Electronics' six analysts are now forecasting revenues of CN¥4.2b in 2024. This would be a solid 17% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 17% to CN¥1.79. Before this latest update, the analysts had been forecasting revenues of CN¥4.9b and earnings per share (EPS) of CN¥2.00 in 2024. Indeed, we can see that the analysts are a lot more bearish about Guobo Electronics' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Guobo Electronics

It'll come as no surprise then, to learn that the analysts have cut their price target 7.8% to CN¥85.90.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Guobo Electronics' rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.3% over the past year. Compare this with other companies in the same industry, which are forecast to see revenue growth of 23% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, Guobo Electronics is expected 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. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 Guobo Electronics 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.