Xiamen Faratronic Co., Ltd. (SHSE:600563) Analysts Are More Bearish Than They Used To Be

One thing we could say about the analysts on Xiamen Faratronic Co., Ltd. (SHSE:600563) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for Xiamen Faratronic from its ten analysts is for revenues of CN¥4.7b in 2024 which, if met, would be a sizeable 20% increase on its sales over the past 12 months. Statutory earnings per share are presumed to step up 17% to CN¥5.34. Previously, the analysts had been modelling revenues of CN¥5.4b and earnings per share (EPS) of CN¥6.25 in 2024. Indeed, we can see that the analysts are a lot more bearish about Xiamen Faratronic's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Xiamen Faratronic

Analysts made no major changes to their price target of CN¥134, suggesting the downgrades are not expected to have a long-term impact on Xiamen Faratronic's valuation.

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 can infer from the latest estimates that forecasts expect a continuation of Xiamen Faratronic'shistorical trends, as the 20% annualised revenue growth to the end of 2024 is roughly in line with the 22% annual revenue 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 18% per year. It's clear that while Xiamen Faratronic's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. 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 Xiamen Faratronic.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Xiamen Faratronic analysts - 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.