The latest analyst coverage could presage a bad day for L.K. Technology Holdings Limited (HKG:558), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 this downgrade, L.K. Technology Holdings' seven analysts are forecasting 2025 revenues to be HK$5.7b, approximately in line with the last 12 months. Statutory earnings per share are anticipated to drop 10% to HK$0.28 in the same period. Before this latest update, the analysts had been forecasting revenues of HK$6.4b and earnings per share (EPS) of HK$0.39 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a large cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to HK$3.89.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the L.K. Technology Holdings' past performance and to peers in the same industry. It's pretty clear that there is an expectation that L.K. Technology Holdings' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 1.4% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. Factoring in the forecast slowdown in growth, it seems obvious that L.K. Technology Holdings is also expected to grow slower than other industry participants.

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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales 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 L.K. Technology Holdings.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with L.K. Technology Holdings' financials, such as concerns around earnings quality. Learn more, and discover the 1 other risk we've identified, 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 with high insider ownership.

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