Time To Worry? Analysts Are Downgrading Their Suzhou Sushi Testing Group Co.,Ltd. (SZSE:300416) Outlook

Market forces rained on the parade of Suzhou Sushi Testing Group Co.,Ltd. (SZSE:300416) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the six analysts covering Suzhou Sushi Testing GroupLtd are now predicting revenues of CN¥2.2b in 2024. If met, this would reflect an okay 5.3% improvement in sales compared to the last 12 months. Per-share earnings are expected to expand 13% to CN¥0.63. Before this latest update, the analysts had been forecasting revenues of CN¥2.5b and earnings per share (EPS) of CN¥0.77 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for Suzhou Sushi Testing GroupLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 23% to CN¥15.87.

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 pretty clear that there is an expectation that Suzhou Sushi Testing GroupLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 11% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 18% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Suzhou Sushi Testing GroupLtd.

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 Suzhou Sushi Testing GroupLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Suzhou Sushi Testing GroupLtd'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 Suzhou Sushi Testing GroupLtd.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Suzhou Sushi Testing GroupLtd 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 with high insider ownership.

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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.