Bearish: Analysts Just Cut Their Beijing CTJ Information Technology Co., Ltd. (SZSE:301153) Revenue and EPS estimates

Today is shaping up negative for Beijing CTJ Information Technology Co., Ltd. (SZSE:301153) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After this downgrade, Beijing CTJ Information Technology's three analysts are now forecasting revenues of CN¥1.1b in 2024. This would be a sizeable 21% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 109% to CN¥0.71. Previously, the analysts had been modelling revenues of CN¥1.3b and earnings per share (EPS) of CN¥0.89 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.

Check out our latest analysis for Beijing CTJ Information Technology

The average price target climbed 34% to CN¥39.53 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

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. 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 18% 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 20% per year. So although Beijing CTJ Information Technology 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 increasing price target is not intuitively what we would expect to see, given these downgrades, and we'd suggest shareholders revisit their investment thesis before making a decision.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Beijing CTJ Information Technology, including its declining profit margins. Learn more, and discover the 1 other warning sign we've identified, 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.