Downgrade: Here's How Analysts See Triumph Science & Technology Co.,Ltd (SHSE:600552) Performing In The Near Term

Today is shaping up negative for Triumph Science & Technology Co.,Ltd (SHSE:600552) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon. Bidders are definitely seeing a different story, with the stock price of CN¥16.06 reflecting a 37% rise in the past week. It will be interesting to see if the downgrade has an impact on buying demand for the company's shares.

Following the downgrade, the most recent consensus for Triumph Science & TechnologyLtd from its five analysts is for revenues of CN¥5.4b in 2024 which, if met, would be a meaningful 20% increase on its sales over the past 12 months. Per-share earnings are expected to surge 156% to CN¥0.20. Prior to this update, the analysts had been forecasting revenues of CN¥6.1b and earnings per share (EPS) of CN¥0.23 in 2024. Indeed, we can see that the analysts are a lot more bearish about Triumph Science & TechnologyLtd's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Triumph Science & TechnologyLtd

What's most unexpected is that the consensus price target rose 9.4% to CN¥14.80, strongly implying the downgrade to forecasts is not expected to be more than a temporary blip.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Triumph Science & TechnologyLtd's past performance and to peers in the same industry. The analysts are definitely expecting Triumph Science & TechnologyLtd's growth to accelerate, with the forecast 20% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Triumph Science & TechnologyLtd is expected 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. 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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Triumph Science & TechnologyLtd analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.