These Analysts Just Made A Massive Downgrade To Their Beijing Airdoc Technology Co., Ltd. (HKG:2251) EPS Forecasts

The latest analyst coverage could presage a bad day for Beijing Airdoc Technology Co., Ltd. (HKG:2251), 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from Beijing Airdoc Technology's dual analysts is for revenues of CN¥285m in 2024, which would reflect a substantial 33% improvement in sales compared to the last 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 55% to CN¥0.77. Yet prior to the latest estimates, the analysts had been forecasting revenues of CN¥340m and losses of CN¥0.29 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Beijing Airdoc Technology

The consensus price target fell 17% to CN¥15.54, implicitly signalling that lower earnings per share are a leading indicator for Beijing Airdoc Technology's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Beijing Airdoc Technology analyst has a price target of CN¥19.27 per share, while the most pessimistic values it at CN¥11.82. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Beijing Airdoc Technology's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of Beijing Airdoc Technology'shistorical trends, as the 33% annualised revenue growth to the end of 2024 is roughly in line with the 31% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. So it's pretty clear that Beijing Airdoc Technology is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Beijing Airdoc Technology. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better 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 Beijing Airdoc Technology.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Beijing Airdoc Technology going out as far as 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.