One Analyst Just Shaved Their GRINM Semiconductor Materials Co., Ltd. (SHSE:688432) Forecasts Dramatically

Market forces rained on the parade of GRINM Semiconductor Materials Co., Ltd. (SHSE:688432) shareholders today, when the covering analyst downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business. At CN¥9.95, shares are up 4.5% 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, GRINM Semiconductor Materials' single analyst is now forecasting revenues of CN¥1.4b in 2024. This would be a substantial 43% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 42% to CN¥0.29. Previously, the analyst had been modelling revenues of CN¥1.8b and earnings per share (EPS) of CN¥0.43 in 2024. Indeed, we can see that the analyst is a lot more bearish about GRINM Semiconductor Materials' prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for GRINM Semiconductor Materials

The consensus price target fell 24% to CN¥13.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analyst is definitely expecting GRINM Semiconductor Materials' growth to accelerate, with the forecast 43% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% 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 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that GRINM Semiconductor Materials is expected to grow much faster than its industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for GRINM Semiconductor Materials. While the analyst 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 the analyst, we'd understand if readers now felt a bit wary of GRINM Semiconductor Materials.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for GRINM Semiconductor Materials going out as far as 2026, and you can see them free on our platform here.

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.