Bearish: Analysts Just Cut Their Weimob Inc. (HKG:2013) Revenue and EPS estimates

The latest analyst coverage could presage a bad day for Weimob Inc. (HKG:2013), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the consensus from Weimob's 18 analysts is for revenues of CN¥2.4b in 2022, which would reflect a not inconsiderable 8.9% decline in sales compared to the last year of performance. The loss per share is expected to ameliorate slightly, reducing to CN¥0.30. However, before this estimates update, the consensus had been expecting revenues of CN¥3.0b and CN¥0.20 per share in losses. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

See our latest analysis for Weimob

The consensus price target fell 17% to CN¥5.95, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. 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. There are some variant perceptions on Weimob, with the most bullish analyst valuing it at CN¥14.22 and the most bearish at CN¥3.70 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Weimob's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 8.9% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 27% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 25% per year. It's pretty clear that Weimob's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Weimob. 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 Weimob.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Weimob 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.