DongHua Testing Technology Co. , Ltd. (SZSE:300354) Analysts Are More Bearish Than They Used To Be

Market forces rained on the parade of DongHua Testing Technology Co. , Ltd. (SZSE:300354) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the downgrade, the latest consensus from DongHua Testing Technology's three analysts is for revenues of CN¥679m in 2024, which would reflect a major 59% improvement in sales compared to the last 12 months. Per-share earnings are expected to jump 45% to CN¥1.47. Before this latest update, the analysts had been forecasting revenues of CN¥783m and earnings per share (EPS) of CN¥1.83 in 2024. Indeed, we can see that the analysts are a lot more bearish about DongHua Testing Technology's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for DongHua Testing Technology

The consensus price target fell 14% to CN¥47.04, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that DongHua Testing Technology's rate of growth is expected to accelerate meaningfully, with the forecast 59% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 24% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that DongHua Testing Technology is expected to grow much faster than its 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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 DongHua Testing Technology.

There might be good reason for analyst bearishness towards DongHua Testing Technology, 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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