News Flash: 4 Analysts Think DouYu International Holdings Limited (NASDAQ:DOYU) Earnings Are Under Threat

Market forces rained on the parade of DouYu International Holdings Limited (NASDAQ:DOYU) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, the current consensus, from the four analysts covering DouYu International Holdings, is for revenues of CN¥4.3b in 2024, which would reflect a concerning 22% reduction in DouYu International Holdings' sales over the past 12 months. Statutory earnings per share are supposed to tumble 32% to CN¥0.76 in the same period. Previously, the analysts had been modelling revenues of CN¥5.0b and earnings per share (EPS) of CN¥3.49 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Check out our latest analysis for DouYu International Holdings

It'll come as no surprise then, to learn that the analysts have cut their price target 5.2% to CN¥45.42. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic DouYu International Holdings analyst has a price target of CN¥50.02 per share, while the most pessimistic values it at CN¥36.13. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with a forecast 22% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 2.4% 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 8.0% per year. It's pretty clear that DouYu International Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for DouYu International Holdings. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that DouYu International Holdings' revenues are expected to grow 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 DouYu International Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple DouYu International Holdings analysts - going out to 2026, 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.