Bearish: Analysts Just Cut Their Skyworth Digital Co., Ltd. (SZSE:000810) Revenue and EPS estimates

One thing we could say about the analysts on Skyworth Digital Co., Ltd. (SZSE:000810) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from Skyworth Digital's six analysts is for revenues of CN¥12b in 2024 which - if met - would reflect a decent 17% increase on its sales over the past 12 months. Per-share earnings are expected to step up 18% to CN¥0.62. Before this latest update, the analysts had been forecasting revenues of CN¥14b and earnings per share (EPS) of CN¥0.92 in 2024. Indeed, we can see that the analysts are a lot more bearish about Skyworth Digital's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for Skyworth Digital

It'll come as no surprise then, to learn that the analysts have cut their price target 5.0% to CN¥15.01.

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. It's clear from the latest estimates that Skyworth Digital's rate of growth is expected to accelerate meaningfully, with the forecast 17% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 8.0% 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 23% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Skyworth Digital is expected to grow slower than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Skyworth Digital. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Skyworth Digital's revenues are expected to grow slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Skyworth Digital.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on Skyworth Digital that suggests the company could be somewhat overvalued. Find out why, and see how we estimate the valuation for 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 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.