Analysts Just Slashed Their Guangzhou Sie Consulting Co., Ltd. (SZSE:300687) EPS Numbers

Market forces rained on the parade of Guangzhou Sie Consulting Co., Ltd. (SZSE:300687) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. Shares are up 7.7% to CN¥17.52 in the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the nine analysts covering Guangzhou Sie Consulting are now predicting revenues of CN¥2.6b in 2024. If met, this would reflect a solid 16% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to accumulate 8.6% to CN¥0.78. Prior to this update, the analysts had been forecasting revenues of CN¥3.1b and earnings per share (EPS) of CN¥0.88 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a considerable drop in earnings per share numbers as well.

View our latest analysis for Guangzhou Sie Consulting

Despite the cuts to forecast earnings, there was no real change to the CN¥28.59 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guangzhou Sie Consulting's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 21% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 22% per year. So although Guangzhou Sie Consulting is expected to maintain its revenue growth rate, it's only growing at about the rate of 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. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Guangzhou Sie Consulting.

Uncomfortably, our automated valuation tool also suggests that Guangzhou Sie Consulting stock could be overvalued following the downgrade. Shareholders could be left disappointed if these estimates play out. You can learn more about our valuation methodology 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 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.