Some Suzhou YourBest New-type Materials Co.,Ltd. (SZSE:301266) Analysts Just Made A Major Cut To Next Year's Estimates

Market forces rained on the parade of Suzhou YourBest New-type Materials Co.,Ltd. (SZSE:301266) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the most recent consensus for Suzhou YourBest New-type MaterialsLtd from its four analysts is for revenues of CN¥3.5b in 2024 which, if met, would be a sizeable 22% increase on its sales over the past 12 months. Per-share earnings are expected to surge 71% to CN¥2.46. Previously, the analysts had been modelling revenues of CN¥4.1b and earnings per share (EPS) of CN¥2.91 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.

See our latest analysis for Suzhou YourBest New-type MaterialsLtd

The consensus price target fell 18% to CN¥53.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

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 YourBest New-type MaterialsLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 22% growth on an annualised basis. This is compared to a historical growth rate of 39% over the past year. Compare this to the 393 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 18% per year. So it's pretty clear that, while Suzhou YourBest New-type MaterialsLtd's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Suzhou YourBest New-type MaterialsLtd's business, like concerns around earnings quality. Learn more, and discover the 1 other concern we've identified, for 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 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.