Need To Know: Analysts Just Made A Substantial Cut To Their S-Enjoy Service Group Co., Limited (HKG:1755) Estimates

The analysts covering S-Enjoy Service Group Co., Limited (HKG:1755) 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 the analysts have soured majorly on the business.

After this downgrade, S-Enjoy Service Group's nine analysts are now forecasting revenues of CN¥5.8b in 2024. This would be a reasonable 6.5% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to grow 12% to CN¥0.57. Prior to this update, the analysts had been forecasting revenues of CN¥6.5b and earnings per share (EPS) of CN¥0.73 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for S-Enjoy Service Group

The consensus price target fell 23% to HK$4.27, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that S-Enjoy Service Group's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.5% growth on an annualised basis. This is compared to a historical growth rate of 28% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 5.2% annually. Even after the forecast slowdown in growth, it seems obvious that S-Enjoy Service Group is also expected to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for S-Enjoy Service Group. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to 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 S-Enjoy Service Group.

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 S-Enjoy Service Group 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.