Revenue Downgrade: Here's What Analysts Forecast For Linklogis Inc. (HKG:9959)

The analysts covering Linklogis Inc. (HKG:9959) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the latest consensus from Linklogis' five analysts is for revenues of CN¥1.2b in 2023, which would reflect a substantial 28% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of CN¥1.3b in 2023. The consensus view seems to have become more pessimistic on Linklogis, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Linklogis

The consensus price target fell 15% to HK$5.62, with the analysts clearly less optimistic about Linklogis' valuation following this update. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Linklogis, with the most bullish analyst valuing it at HK$7.50 and the most bearish at HK$4.06 per share. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

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 analysts are definitely expecting Linklogis' growth to accelerate, with the forecast 28% annualised growth to the end of 2023 ranking favourably alongside historical growth of 8.8% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 27% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Linklogis is expected to grow at about the same rate as the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Linklogis this year. Analysts also expect revenues to grow approximately in line with the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Linklogis' future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Linklogis going forwards.

Looking for more information? At least one of Linklogis' five analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.