The analysts covering Thunder Software Technology Co.,Ltd. (SZSE:300496) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

After this downgrade, Thunder Software TechnologyLtd's 20 analysts are now forecasting revenues of CN¥6.2b in 2024. This would be a decent 18% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 62% to CN¥1.65. Previously, the analysts had been modelling revenues of CN¥7.2b and earnings per share (EPS) of CN¥2.17 in 2024. 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.

The consensus price target fell 9.9% to CN¥73.37, 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. It's pretty clear that there is an expectation that Thunder Software TechnologyLtd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 28% 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 22% per year. Factoring in the forecast slowdown in growth, it seems obvious that Thunder Software TechnologyLtd 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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Thunder Software TechnologyLtd'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 Simply Wall St, we have a full range of analyst estimates for Thunder Software TechnologyLtd going out to 2026, 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.