One thing we could say about the analysts on Hithink RoyalFlush Information Network Co., Ltd. (SZSE:300033) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After the downgrade, the 13 analysts covering Hithink RoyalFlush Information Network are now predicting revenues of CN¥4.1b in 2024. If met, this would reflect a solid 12% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 24% to CN¥3.63. Previously, the analysts had been modelling revenues of CN¥4.6b and earnings per share (EPS) of CN¥3.87 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.9% to CN¥166.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Hithink RoyalFlush Information Network's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 21% over the past five years. Compare this to the 60 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 12% per year. So it's pretty clear that, while Hithink RoyalFlush Information Network's revenue growth is expected to slow, it's expected to grow roughly in line with the 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. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Hithink RoyalFlush Information Network going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hithink RoyalFlush Information Network analysts - going out to 2026, and you can see them 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 that insiders are buying.

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