One Beijing eGOVA Co,. Ltd (SZSE:300075) Analyst Just Cut Their EPS Forecasts

Today is shaping up negative for Beijing eGOVA Co,. Ltd (SZSE:300075) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the solitary analyst covering Beijing eGOVA Co is now predicting revenues of CN¥1.3b in 2024. If met, this would reflect a huge 32% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 124% to CN¥0.24. Prior to this update, the analyst had been forecasting revenues of CN¥1.7b and earnings per share (EPS) of CN¥0.56 in 2024. Indeed, we can see that the analyst is a lot more bearish about Beijing eGOVA Co's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Beijing eGOVA Co

It'll come as no surprise then, to learn that the analyst has cut their price target 24% to CN¥16.97.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing stands out from these estimates, which is that Beijing eGOVA Co is forecast to grow faster in the future than it has in the past, with revenues expected to display 32% annualised growth until the end of 2024. If achieved, this would be a much better result than the 0.4% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 15% per year. So it looks like Beijing eGOVA Co is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Beijing eGOVA Co.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Beijing eGOVA Co that suggests the company could be somewhat overvalued. Find out why, and see how we estimate the valuation for free on our platform here.

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 with high insider ownership.

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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.