Today is shaping up negative for Appotronics Corporation Limited (SHSE:688007) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the latest consensus from Appotronics' eight analysts is for revenues of CN¥2.4b in 2024, which would reflect a notable 10% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to ascend 18% to CN¥0.26. Previously, the analysts had been modelling revenues of CN¥3.1b and earnings per share (EPS) of CN¥0.56 in 2024. Indeed, we can see that the analysts are a lot more bearish about Appotronics' prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Appotronics'historical trends, as the 10% annualised revenue growth to the end of 2024 is roughly in line with the 9.8% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 19% annually. So although Appotronics is expected to maintain its revenue growth rate, it's forecast to grow slower 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. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. We wouldn't be surprised to find shareholders feeling a bit shell-shocked, after these downgrades. It looks like analysts have become a lot more bearish on Appotronics, and their negativity could be grounds for caution.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Appotronics going out to 2025, and you can see them free on our platform here.

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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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.