One thing we could say about the analysts on Shenzhen Kedali Industry Co., Ltd. (SZSE:002850) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business. Bidders are definitely seeing a different story, with the stock price of CN¥90.07 reflecting a 16% rise in the past week. With such a sharp increase, it seems brokers may have seen something that is not yet being priced in by the wider market.

Following the downgrade, the most recent consensus for Shenzhen Kedali Industry from its eleven analysts is for revenues of CN¥16b in 2024 which, if met, would be a sizeable 52% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 59% to CN¥6.50. Before this latest update, the analysts had been forecasting revenues of CN¥18b and earnings per share (EPS) of CN¥7.44 in 2024. Indeed, we can see that the analysts are a lot more bearish about Shenzhen Kedali Industry's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for Shenzhen Kedali Industry

It'll come as no surprise then, to learn that the analysts have cut their price target 12% to CN¥136.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 39% growth on an annualised basis. That is in line with its 41% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 22% annually. So although Shenzhen Kedali Industry is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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. While analysts 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.

After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Shenzhen Kedali Industry's business, like concerns around earnings quality. For more information, you can click here to discover this and the 1 other risk we've identified.

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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