G.H.Y Culture & Media Holding Co., Limited (SGX:XJB) Analysts Are More Bearish Than They Used To Be

Market forces rained on the parade of G.H.Y Culture & Media Holding Co., Limited (SGX:XJB) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After this downgrade, G.H.Y Culture & Media Holding's dual analysts are now forecasting revenues of S$152m in 2021. This would be a decent 14% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to climb 18% to S$0.034. Prior to this update, the analysts had been forecasting revenues of S$214m and earnings per share (EPS) of S$0.055 in 2021. Indeed, we can see that the analysts are a lot more bearish about G.H.Y Culture & Media Holding's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for G.H.Y Culture & Media Holding

The consensus price target fell 12% to S$0.96, with the weaker earnings outlook clearly leading analyst valuation estimates. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on G.H.Y Culture & Media Holding, with the most bullish analyst valuing it at S$1.05 and the most bearish at S$0.87 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that G.H.Y Culture & Media Holding's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2021 being well below the historical 117% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.9% annually. So it's pretty clear that, while G.H.Y Culture & Media Holding's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of G.H.Y Culture & Media Holding.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2023, 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.
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