Newsflash: Ningbo Yongxin Optics Co.,Ltd (SHSE:603297) Analysts Have Been Trimming Their Revenue Forecasts

The analysts covering Ningbo Yongxin Optics Co.,Ltd (SHSE:603297) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. At CN¥73.68, shares are up 7.0% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the latest consensus from Ningbo Yongxin OpticsLtd's seven analysts is for revenues of CN¥1.1b in 2024, which would reflect a substantial 26% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to leap 56% to CN¥3.28. Prior to this update, the analysts had been forecasting revenues of CN¥1.4b and earnings per share (EPS) of CN¥3.25 in 2024. So there's been a clear change in analyst sentiment in the recent update, with the analysts making a pretty serious reduction to revenues and reconfirming their earnings per share estimates.

See our latest analysis for Ningbo Yongxin OpticsLtd

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Ningbo Yongxin OpticsLtd's rate of growth is expected to accelerate meaningfully, with the forecast 37% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 11% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Ningbo Yongxin OpticsLtd to grow faster than the wider industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Ningbo Yongxin OpticsLtd going forwards.

There might be good reason for analyst bearishness towards Ningbo Yongxin OpticsLtd, like concerns around earnings quality. For more information, you can click here to discover this and the 1 other flag we've identified.

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.