Revenue Downgrade: Here's What Analysts Forecast For SCE Intelligent Commercial Management Holdings Limited (HKG:606)

Market forces rained on the parade of SCE Intelligent Commercial Management Holdings Limited (HKG:606) 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, SCE Intelligent Commercial Management Holdings' three analysts are now forecasting revenues of CN¥1.6b in 2022. This would be a substantial 56% improvement in sales compared to the last 12 months. Per-share earnings are expected to soar 34% to CN¥0.20. Prior to this update, the analysts had been forecasting revenues of CN¥1.9b and earnings per share (EPS) of CN¥0.21 in 2022. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

Check out our latest analysis for SCE Intelligent Commercial Management Holdings

The consensus price target fell 13% to CN¥2.67, with the weaker earnings outlook clearly leading analyst valuation estimates. 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. The most optimistic SCE Intelligent Commercial Management Holdings analyst has a price target of CN¥3.62 per share, while the most pessimistic values it at CN¥2.60. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await SCE Intelligent Commercial Management Holdings shareholders.

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. The period to the end of 2022 brings more of the same, according to the analysts, with revenue forecast to display 56% growth on an annualised basis. That is in line with its 49% annual growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 8.7% per year. So although SCE Intelligent Commercial Management Holdings is expected to maintain its revenue growth rate, it's definitely 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 SCE Intelligent Commercial Management Holdings. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better 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. Given the stark change in sentiment, we'd understand if investors became more cautious on SCE Intelligent Commercial Management Holdings after today.

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 SCE Intelligent Commercial Management Holdings 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.