Time To Worry? Analysts Are Downgrading Their Beijing eGOVA Co,. Ltd (SZSE:300075) Outlook

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

Following the downgrade, the most recent consensus for Beijing eGOVA Co from its dual analysts is for revenues of CN¥1.7b in 2024 which, if met, would be a substantial 40% increase on its sales over the past 12 months. Statutory earnings per share are presumed to surge 159% to CN¥0.56. Previously, the analysts had been modelling revenues of CN¥2.2b and earnings per share (EPS) of CN¥0.68 in 2024. Indeed, we can see that the analysts are a lot more bearish about Beijing eGOVA Co's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Beijing eGOVA Co

The consensus price target fell 14% to CN¥22.39, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. It's clear from the latest estimates that Beijing eGOVA Co's rate of growth is expected to accelerate meaningfully, with the forecast 40% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 2.6% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Beijing eGOVA Co is expected to grow much faster than its 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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Beijing eGOVA Co going out as far as 2026, and you can see them 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.