The Consensus EPS Estimates For Sichuan Jiuyuan Yinhai Software.Co.,Ltd (SZSE:002777) Just Fell Dramatically

One thing we could say about the analysts on Sichuan Jiuyuan Yinhai Software.Co.,Ltd (SZSE:002777) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, Sichuan Jiuyuan Yinhai Software.Co.Ltd's twin analysts are now forecasting revenues of CN¥1.6b in 2024. This would be a decent 20% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 31% to CN¥0.54. Prior to this update, the analysts had been forecasting revenues of CN¥1.8b and earnings per share (EPS) of CN¥0.70 in 2024. Indeed, we can see that the analysts are a lot more bearish about Sichuan Jiuyuan Yinhai Software.Co.Ltd's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Sichuan Jiuyuan Yinhai Software.Co.Ltd

The average price target climbed 7.4% to CN¥32.08 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Sichuan Jiuyuan Yinhai Software.Co.Ltd's rate of growth is expected to accelerate meaningfully, with the forecast 20% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 9.9% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% annually. Sichuan Jiuyuan Yinhai Software.Co.Ltd is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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 Sichuan Jiuyuan Yinhai Software.Co.Ltd. 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 rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of Sichuan Jiuyuan Yinhai Software.Co.Ltd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2026, which can be seen for 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.