Analysts Just Shaved Their Sino Wealth Electronic Ltd. (SZSE:300327) Forecasts Dramatically

Today is shaping up negative for Sino Wealth Electronic Ltd. (SZSE:300327) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the current consensus from Sino Wealth Electronic's four analysts is for revenues of CN¥1.6b in 2024 which - if met - would reflect a notable 19% increase on its sales over the past 12 months. Statutory earnings per share are supposed to dip 9.6% to CN¥0.49 in the same period. Before this latest update, the analysts had been forecasting revenues of CN¥1.9b and earnings per share (EPS) of CN¥0.88 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sino Wealth Electronic's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Sino Wealth Electronic

The consensus price target fell 10% to CN¥27.79, with the weaker earnings outlook clearly leading analyst valuation estimates.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sino Wealth Electronic's past performance and to peers in the same industry. It's clear from the latest estimates that Sino Wealth Electronic's rate of growth is expected to accelerate meaningfully, with the forecast 19% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 15% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 23% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Sino Wealth Electronic is expected to grow at about the same rate as the wider industry.

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 Sino Wealth Electronic. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

There might be good reason for analyst bearishness towards Sino Wealth Electronic, like concerns around earnings quality. For more information, you can click here to discover this and the 1 other risk we've identified.

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.