What You Need To Know About The Shanghai Baosight Software Co.,Ltd. (SHSE:600845) Analyst Downgrade Today

The latest analyst coverage could presage a bad day for Shanghai Baosight Software Co.,Ltd. (SHSE:600845), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Shanghai Baosight SoftwareLtd's twelve analysts is for revenues of CN¥15b in 2024 which - if met - would reflect a notable 19% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 24% to CN¥1.31. Previously, the analysts had been modelling revenues of CN¥19b and earnings per share (EPS) of CN¥1.43 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a sizeable cut to revenue estimates and a minor downgrade to EPS estimates to boot.

Check out our latest analysis for Shanghai Baosight SoftwareLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 8.5% to CN¥50.72.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that forecasts expect a continuation of Shanghai Baosight SoftwareLtd'shistorical trends, as the 19% annualised revenue growth to the end of 2024 is roughly in line with the 18% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 22% annually. So although Shanghai Baosight SoftwareLtd is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Shanghai Baosight SoftwareLtd's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Shanghai Baosight SoftwareLtd going forwards.

After a downgrade like this one, it's pretty clear that previous forecasts were too optimistic. Worse, it's possible that the forecast future income could struggle to cover Shanghai Baosight SoftwareLtd'sdividend payments. You can learn more, and discover the 1 possible risk we've identified, for free on our platform here.

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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.