Revenue Downgrade: Here's What Analysts Forecast For China Transinfo Technology Co., Ltd (SZSE:002373)

One thing we could say about the analysts on China Transinfo Technology Co., Ltd (SZSE:002373) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the most recent consensus for China Transinfo Technology from its six analysts is for revenues of CN¥8.7b in 2024 which, if met, would be a meaningful 12% increase on its sales over the past 12 months. Statutory earnings per share are presumed to climb 19% to CN¥0.41. Before this latest update, the analysts had been forecasting revenues of CN¥9.8b and earnings per share (EPS) of CN¥0.44 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a substantial drop in revenue estimates and a minor downgrade to earnings per share numbers as well.

See our latest analysis for China Transinfo Technology

Analysts made no major changes to their price target of CN¥12.33, suggesting the downgrades are not expected to have a long-term impact on China Transinfo Technology's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the China Transinfo Technology's past performance and to peers in the same industry. For example, we noticed that China Transinfo Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.9% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 19% per year. Although China Transinfo Technology's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that China Transinfo Technology's revenues are expected to grow slower than the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on China Transinfo Technology after today.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple China Transinfo Technology analysts - 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.

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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.