Zhou Hei Ya International Holdings Company Limited (HKG:1458) Analysts Are Reducing Their Forecasts For This Year

The latest analyst coverage could presage a bad day for Zhou Hei Ya International Holdings Company Limited (HKG:1458), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 consensus from nine analysts covering Zhou Hei Ya International Holdings is for revenues of CN¥2.5b in 2024, implying a small 2.6% decline in sales compared to the last 12 months. Per-share earnings are expected to soar 87% to CN¥0.04. Previously, the analysts had been modelling revenues of CN¥3.1b and earnings per share (EPS) of CN¥0.09 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Zhou Hei Ya International Holdings

It'll come as no surprise then, to learn that the analysts have cut their price target 21% to CN¥1.57. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Zhou Hei Ya International Holdings analyst has a price target of CN¥2.21 per share, while the most pessimistic values it at CN¥1.28. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

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. Over the past five years, revenues have declined around 2.8% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 5.2% decline in revenue until the end of 2024. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 5.7% per year. So while a broad number of companies are forecast to grow, unfortunately Zhou Hei Ya International Holdings is expected to see its sales affected worse than other companies in the 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 Zhou Hei Ya International Holdings. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Zhou Hei Ya International Holdings' 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 Zhou Hei Ya International Holdings.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Zhou Hei Ya International Holdings 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.