Analysts Are More Bearish On Shenzhen Sinovatio Technology Co., Ltd. (SZSE:002912) Than They Used To Be

Today is shaping up negative for Shenzhen Sinovatio Technology Co., Ltd. (SZSE:002912) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the most recent consensus for Shenzhen Sinovatio Technology from its two analysts is for revenues of CN¥803m in 2024 which, if met, would be a sizeable 23% increase on its sales over the past 12 months. Statutory earnings per share are presumed to step up 14% to CN¥0.76. Prior to this update, the analysts had been forecasting revenues of CN¥957m and earnings per share (EPS) of CN¥1.01 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Shenzhen Sinovatio Technology

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. For example, we noticed that Shenzhen Sinovatio Technology's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 23% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 9.0% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 17% per year. Not only are Shenzhen Sinovatio Technology's revenues expected to improve, it seems that the analysts are also expecting it to grow faster 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 Shenzhen Sinovatio Technology. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Shenzhen Sinovatio Technology, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, which can be seen 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.