Celebrations may be in order for Eoptolink Technology Inc., Ltd. (SZSE:300502) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance.

Following the upgrade, the current consensus from Eoptolink Technology's eleven analysts is for revenues of CN¥7.1b in 2024 which - if met - would reflect a sizeable 57% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 63% to CN¥2.92. Before this latest update, the analysts had been forecasting revenues of CN¥6.1b and earnings per share (EPS) of CN¥2.13 in 2024. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

Despite these upgrades, the analysts have not made any major changes to their price target of CN¥114, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Eoptolink Technology's growth to accelerate, with the forecast 147% annualised growth to the end of 2024 ranking favourably alongside historical growth of 23% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Eoptolink Technology is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that analysts upgraded their earnings per share estimates for this year, expecting improving business conditions. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Eoptolink Technology.

These earnings upgrades look like a sterling endorsement, but before diving in - you should know that we've spotted 2 potential risk with Eoptolink Technology, including concerns around earnings quality. For more information, you can click through to our platform to learn more about this and the 1 other risk we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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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.