Today is shaping up negative for Tellgen Corporation (SZSE:300642) shareholders, with the analysts delivering a substantial negative revision to next year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

After the downgrade, the dual analysts covering Tellgen are now predicting revenues of CN¥711m in 2024. If met, this would reflect a meaningful 19% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 72% to CN¥0.84. Prior to this update, the analysts had been forecasting revenues of CN¥1.1b and earnings per share (EPS) of CN¥1.27 in 2024. It looks like analyst sentiment has declined substantially, with a sizeable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for Tellgen

The consensus price target fell 12% to CN¥23.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Tellgen'shistorical trends, as the 15% annualised revenue growth to the end of 2024 is roughly in line with the 15% annual revenue growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 20% annually. So it's pretty clear that Tellgen is expected to grow slower than similar companies in the same 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 Tellgen. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Tellgen's revenues are expected to grow slower 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.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2025, which can be seen for 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.