This Xintec Inc. (GTSM:3374) Analyst Is Way More Bearish Than They Used To Be

The latest analyst coverage could presage a bad day for Xintec Inc. (GTSM:3374), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

After the downgrade, the solo analyst covering Xintec is now predicting revenues of NT$10b in 2021. If met, this would reflect a substantial 61% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 163% to NT$10.60. Prior to this update, the analyst had been forecasting revenues of NT$14b and earnings per share (EPS) of NT$12.12 in 2021. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a real cut to earnings per share numbers as well.

View our latest analysis for Xintec

It'll come as no surprise then, to learn that the analyst has cut their price target 14% to NT$236.

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. The analyst is definitely expecting Xintec's growth to accelerate, with the forecast 61% growth ranking favourably alongside historical growth of 5.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Xintec is expected to grow much faster than its industry.

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. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2022, 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 that insiders are buying.

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