News Flash: 6 Analysts Think Yidu Tech Inc. (HKG:2158) Earnings Are Under Threat

The analysts covering Yidu Tech Inc. (HKG:2158) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the current consensus from Yidu Tech's six analysts is for revenues of CN¥960m in 2024 which - if met - would reflect a decent 19% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 41% to CN¥0.35. However, before this estimates update, the consensus had been expecting revenues of CN¥1.3b and CN¥0.28 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Yidu Tech

The consensus price target fell 20% to CN¥9.03, implicitly signalling that lower earnings per share are a leading indicator for Yidu Tech's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Yidu Tech at CN¥13.44 per share, while the most bearish prices it at CN¥5.22. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Yidu Tech's past performance and to peers in the same industry. We would highlight that Yidu Tech's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2024 being well below the historical 28% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 17% annually. Factoring in the forecast slowdown in growth, it looks like Yidu Tech is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. 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 Yidu Tech.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Yidu Tech 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.