Newsflash: Weimob Inc. (HKG:2013) Analysts Have Been Trimming Their Revenue Forecasts

Today is shaping up negative for Weimob Inc. (HKG:2013) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative. Surprisingly the share price has been buoyant, rising 12% to HK$1.27 in the past 7 days. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the downgrade, the consensus from 14 analysts covering Weimob is for revenues of CN¥1.8b in 2024, implying a measurable 2.8% decline in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CN¥2.5b in 2024. The consensus view seems to have become more pessimistic on Weimob, noting the pretty serious reduction to revenue estimates in this update.

Check out our latest analysis for Weimob

Notably, the analysts have cut their price target 11% to CN¥1.86, suggesting concerns around Weimob's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Weimob, with the most bullish analyst valuing it at CN¥2.78 and the most bearish at CN¥0.91 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.5% by the end of 2024. This indicates a significant reduction from annual growth of 7.4% 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 19% per year. It's pretty clear that Weimob's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Weimob this year. They're also anticipating slower 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. Given the stark change in sentiment, we'd understand if investors became more cautious on Weimob after today.

Of course, this isn't the full story. At least one of Weimob's 14 analysts has provided estimates out to 2026, which can be seen 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 with high insider ownership.

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