Today is shaping up negative for Shanghai Anlogic Infotech Co., Ltd. (SHSE:688107) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from Shanghai Anlogic Infotech's four analysts is for revenues of CN¥747m in 2024 which - if met - would reflect a major 22% increase on its sales over the past 12 months. Losses are presumed to reduce, shrinking 11% per share from last year to CN¥0.53. However, before this estimates update, the consensus had been expecting revenues of CN¥1.0b and CN¥0.30 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Shanghai Anlogic Infotech's past performance and to peers in the same industry. One thing stands out from these estimates, which is that Shanghai Anlogic Infotech is forecast to grow faster in the future than it has in the past, with revenues expected to display 48% annualised growth until the end of 2024. If achieved, this would be a much better result than the 0.7% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 23% annually. Not only are Shanghai Anlogic Infotech's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Shanghai Anlogic Infotech. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on Shanghai Anlogic Infotech, and a few readers might choose to steer clear of the stock.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Shanghai Anlogic Infotech analysts - 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 backed by insiders.

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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.