Some Angelalign Technology Inc. (HKG:6699) Analysts Just Made A Major Cut To Next Year's Estimates

The latest analyst coverage could presage a bad day for Angelalign Technology Inc. (HKG:6699), 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.

After the downgrade, the consensus from Angelalign Technology's eleven analysts is for revenues of CN¥1.2b in 2022, which would reflect a small 2.2% decline in sales compared to the last year of performance. Statutory earnings per share are supposed to decline 14% to CN¥1.35 in the same period. Prior to this update, the analysts had been forecasting revenues of CN¥1.4b and earnings per share (EPS) of CN¥1.80 in 2022. Indeed, we can see that the analysts are a lot more bearish about Angelalign Technology's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Angelalign Technology

The consensus price target fell 6.5% to HK$157, with the weaker earnings outlook clearly leading analyst valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Angelalign Technology, with the most bullish analyst valuing it at HK$224 and the most bearish at HK$104 per share. 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.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 2.2% by the end of 2022. This indicates a significant reduction from annual growth of 18% over the last year. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 44% per year. It's pretty clear that Angelalign Technology's revenues are expected to perform substantially worse than the wider 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Angelalign Technology's 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 Angelalign Technology.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Angelalign Technology analysts - going out to 2024, 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.