Analysts Have Just Cut Their Archosaur Games Inc. (HKG:9990) Revenue Estimates By 12%

Market forces rained on the parade of Archosaur Games Inc. (HKG:9990) shareholders today, when the analysts downgraded their forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

After this downgrade, Archosaur Games' three analysts are now forecasting revenues of CN¥993m in 2022. This would be a sizeable 42% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing CN¥1.1b of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on Archosaur Games, given the measurable cut to revenue estimates.

View our latest analysis for Archosaur Games

Notably, the analysts have cut their price target 18% to CN¥4.98, suggesting concerns around Archosaur Games' valuation. 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. The most optimistic Archosaur Games analyst has a price target of CN¥7.86 per share, while the most pessimistic values it at CN¥3.20. 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 Archosaur Games' past performance and to peers in the same industry. One thing stands out from these estimates, which is that Archosaur Games is forecast to grow faster in the future than it has in the past, with revenues expected to display 42% annualised growth until the end of 2022. If achieved, this would be a much better result than the 40% annual decline over the past year. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 22% annually. Not only are Archosaur Games' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They're also forecasting more rapid revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Archosaur Games going forwards.

Thirsting for more data? We have estimates for Archosaur Games from its three analysts out until 2024, 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 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.