The latest analyst coverage could presage a bad day for OPT Machine Vision Tech Co., Ltd. (SHSE:688686), 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 most recent consensus for OPT Machine Vision Tech from its seven analysts is for revenues of CN¥1.1b in 2024 which, if met, would be a decent 17% increase on its sales over the past 12 months. Per-share earnings are expected to soar 32% to CN¥2.24. Before this latest update, the analysts had been forecasting revenues of CN¥1.4b and earnings per share (EPS) of CN¥3.09 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

Analysts made no major changes to their price target of CN¥107, suggesting the downgrades are not expected to have a long-term impact on OPT Machine Vision Tech's valuation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the OPT Machine Vision Tech's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 17% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 19% annually. It's clear that while OPT Machine Vision Tech's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.

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. We're also surprised to see that the price target went unchanged. Still, deteriorating business conditions (assuming accurate forecasts!) can be a leading indicator for the stock price, so we wouldn't blame investors for being more cautious on OPT Machine Vision Tech after the downgrade.

Unfortunately, by using these new estimates as a starting point, we've run a discounted cash flow calculation (DCF) on OPT Machine Vision Tech that suggests the company could be somewhat overvalued. Find out why, and see how we estimate the valuation 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 that insiders are buying.

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