Downgrade: Here's How Analysts See China East Education Holdings Limited (HKG:667) Performing In The Near Term

The analysts covering China East Education Holdings Limited (HKG:667) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory 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 China East Education Holdings' eleven analysts is for revenues of CN¥4.4b in 2024, which would reflect a meaningful 9.6% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 41% to CN¥0.18. Previously, the analysts had been modelling revenues of CN¥4.9b and earnings per share (EPS) of CN¥0.29 in 2024. Indeed, we can see that the analysts are a lot more bearish about China East Education Holdings' prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for China East Education Holdings

Despite the cuts to forecast earnings, there was no real change to the HK$4.89 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting China East Education Holdings' growth to accelerate, with the forecast 9.6% annualised growth to the end of 2024 ranking favourably alongside historical growth of 2.6% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 15% annually. So it's clear that despite the acceleration in growth, China East Education Holdings is expected to grow meaningfully slower than the industry average.

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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of China East Education Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for China East Education Holdings 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 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.