Revenue Downgrade: Here's What Analysts Forecast For Powerlong Real Estate Holdings Limited (HKG:1238)

One thing we could say about the analysts on Powerlong Real Estate Holdings Limited (HKG:1238) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the latest downgrade, the eight analysts covering Powerlong Real Estate Holdings provided consensus estimates of CN¥34b revenue in 2022, which would reflect a small 7.0% decline on its sales over the past 12 months. Before the latest update, the analysts were foreseeing CN¥44b of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on Powerlong Real Estate Holdings, given the pretty serious reduction to revenue estimates.

View our latest analysis for Powerlong Real Estate Holdings

We'd point out that there was no major changes to their price target of CN¥2.97, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Powerlong Real Estate Holdings at CN¥8.82 per share, while the most bearish prices it at CN¥0.69. With such a wide range in price targets, the analysts are almost certainly betting on widely diverse outcomes for the underlying business. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 14% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 21% 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 8.5% per year. It's pretty clear that Powerlong Real Estate Holdings' 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 revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Powerlong Real Estate Holdings after today.

That said, the analysts might have good reason to be negative on Powerlong Real Estate Holdings, given its declining profit margins. Learn more, and discover the 3 other risks we've identified, for 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.