Downgrade: Here's How Analysts See Thunder Software Technology Co.,Ltd. (SZSE:300496) Performing In The Near Term

Today is shaping up negative for Thunder Software Technology Co.,Ltd. (SZSE:300496) 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.

After this downgrade, Thunder Software TechnologyLtd's 21 analysts are now forecasting revenues of CN¥6.4b in 2024. This would be a huge 21% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 68% to CN¥1.70. Prior to this update, the analysts had been forecasting revenues of CN¥7.2b and earnings per share (EPS) of CN¥2.17 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for Thunder Software TechnologyLtd

The consensus price target fell 11% to CN¥72.37, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Thunder Software TechnologyLtd's revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2024 being well below the historical 28% p.a. growth over the last five years. Compare this to the 139 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. Factoring in the forecast slowdown in growth, it looks like Thunder Software TechnologyLtd is forecast to grow at about the same rate as 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. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Thunder Software TechnologyLtd going out to 2026, and you can see them 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 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.