The latest analyst coverage could presage a bad day for JWIPC Technology Co., Ltd. (SZSE:001339), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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 current consensus from JWIPC Technology's dual analysts is for revenues of CN¥4.2b in 2024 which - if met - would reflect a solid 16% increase on its sales over the past 12 months. Per-share earnings are expected to soar 1,162% to CN¥0.55. Before this latest update, the analysts had been forecasting revenues of CN¥4.7b and earnings per share (EPS) of CN¥1.15 in 2024. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

The average price target climbed 27% to CN¥35.13 despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes.

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. The analysts are definitely expecting JWIPC Technology's growth to accelerate, with the forecast 16% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past year. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 14% per year. JWIPC Technology is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. The rising price target is a puzzle, but still - with a serious cut to this year's outlook, we wouldn't be surprised if investors were a bit wary of JWIPC Technology.

So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with JWIPC Technology, including concerns around earnings quality. For more information, you can click here to discover this and the 2 other flags we've identified.

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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.