News Flash: 7 Analysts Think Cowell e Holdings Inc. (HKG:1415) Earnings Are Under Threat

Market forces rained on the parade of Cowell e Holdings Inc. (HKG:1415) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. The stock price has risen 4.5% to HK$13.90 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following this downgrade, Cowell e Holdings' seven analysts are forecasting 2023 revenues to be US$1.1b, approximately in line with the last 12 months. Statutory earnings per share are anticipated to decrease 9.9% to US$0.075 in the same period. Previously, the analysts had been modelling revenues of US$1.4b and earnings per share (EPS) of US$0.12 in 2023. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Cowell e Holdings

The consensus price target fell 12% to US$2.49, with the weaker earnings outlook clearly leading analyst valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Cowell e Holdings analyst has a price target of US$3.04 per share, while the most pessimistic values it at US$2.04. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 3.7% by the end of 2023. This indicates a significant reduction from annual growth of 16% 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 11% per year. It's pretty clear that Cowell e 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 earnings per share estimates, expecting a clear decline in business conditions. 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 Cowell e Holdings.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Cowell e Holdings analysts - going out to 2025, 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.