One Analyst Just Shaved Their Pacific Radiance Ltd. (SGX:RXS) Forecasts Dramatically

Today is shaping up negative for Pacific Radiance Ltd. (SGX:RXS) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Pacific Radiance's solitary analyst is for revenues of US$49m in 2025 which - if met - would reflect a notable 12% increase on its sales over the past 12 months. Statutory earnings per share are supposed to tumble 78% to US$0.004 in the same period. Before this latest update, the analyst had been forecasting revenues of US$56m and earnings per share (EPS) of US$0.027 in 2025. Indeed, we can see that the analyst is a lot more bearish about Pacific Radiance's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Pacific Radiance

Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Pacific Radiance's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 12% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 6.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.8% per year. So it looks like Pacific Radiance is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, the analyst also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like the analyst has become a lot more bearish on Pacific Radiance, and their negativity could be grounds for caution.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with Pacific Radiance, including concerns around earnings quality. Learn more, and discover the 1 other risk we've identified, 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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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.