Bearish: Analysts Just Cut Their Maoyan Entertainment (HKG:1896) Revenue and EPS estimates

Today is shaping up negative for Maoyan Entertainment (HKG:1896) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After the downgrade, the consensus from Maoyan Entertainment's 13 analysts is for revenues of CN¥4.5b in 2024, which would reflect a small 4.8% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to sink 19% to CN¥0.56 in the same period. Previously, the analysts had been modelling revenues of CN¥5.0b and earnings per share (EPS) of CN¥0.79 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

View our latest analysis for Maoyan Entertainment

The consensus price target fell 27% to CN¥8.32, with the weaker earnings outlook clearly leading analyst valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Maoyan Entertainment, with the most bullish analyst valuing it at CN¥11.03 and the most bearish at CN¥6.09 per share. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Maoyan Entertainment's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.8% by the end of 2024. This indicates a significant reduction from annual growth of 6.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 16% per year. It's pretty clear that Maoyan Entertainment'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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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 Maoyan Entertainment.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Maoyan Entertainment analysts - going out to 2026, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.