Time To Worry? Analysts Are Downgrading Their Hainan Drinda New Energy Technology Co., Ltd. (SZSE:002865) Outlook

Market forces rained on the parade of Hainan Drinda New Energy Technology Co., Ltd. (SZSE:002865) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, Hainan Drinda New Energy Technology's three analysts currently expect revenues in 2024 to be CN¥19b, approximately in line with the last 12 months. Statutory earnings per share are presumed to bounce 23% to CN¥4.43. Before this latest update, the analysts had been forecasting revenues of CN¥31b and earnings per share (EPS) of CN¥13.55 in 2024. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Hainan Drinda New Energy Technology

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. We would highlight that Hainan Drinda New Energy Technology's revenue growth is expected to slow, with the forecast 0.2% annualised growth rate until the end of 2024 being well below the historical 72% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 24% annually. Factoring in the forecast slowdown in growth, it seems obvious that Hainan Drinda New Energy Technology is also expected to grow slower than other industry participants.

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 Hainan Drinda New Energy Technology. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Hainan Drinda New Energy Technology, and a few readers might choose to steer clear of the stock.

There might be good reason for analyst bearishness towards Hainan Drinda New Energy Technology, like concerns around earnings quality. For more information, you can click here to discover this and the 3 other concerns we've identified.

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.