The latest analyst coverage could presage a bad day for 3Peak Incorporated (SHSE:688536), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from 3Peak's six analysts is for revenues of CN¥1.7b in 2024 which - if met - would reflect a huge 49% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 3,838% to CN¥1.83. Prior to this update, the analysts had been forecasting revenues of CN¥2.0b and earnings per share (EPS) of CN¥2.64 in 2024. Indeed, we can see that the analysts are a lot more bearish about 3Peak's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 10% to CN¥134.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the 3Peak's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of 3Peak'shistorical trends, as the 37% annualised revenue growth to the end of 2024 is roughly in line with the 37% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 24% annually. So although 3Peak is expected to maintain its revenue growth rate, it's definitely expected to grow faster 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 3Peak. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to next year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of 3Peak.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with 3Peak, including dilutive stock issuance over the past year. For more information, you can click here to discover this and the 2 other risks we've identified.

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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