The latest analyst coverage could presage a bad day for Qingdao NovelBeam Technology Co.,Ltd. (SHSE:688677), 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 analysts have soured majorly on the business. Bidders are definitely seeing a different story, with the stock price of CN¥57.40 reflecting a 12% rise in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.
After this downgrade, Qingdao NovelBeam TechnologyLtd's five analysts are now forecasting revenues of CN¥545m in 2023. This would be a satisfactory 6.1% improvement in sales compared to the last 12 months. Per-share earnings are expected to shoot up 23% to CN¥1.62. Before this latest update, the analysts had been forecasting revenues of CN¥639m and earnings per share (EPS) of CN¥1.97 in 2023. Indeed, we can see that the analysts are a lot more bearish about Qingdao NovelBeam TechnologyLtd's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for Qingdao NovelBeam TechnologyLtd
It'll come as no surprise then, to learn that the analysts have cut their price target 14% to CN¥79.66.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Qingdao NovelBeam TechnologyLtd's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 6.1% growth on an annualised basis. This is compared to a historical growth rate of 22% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 20% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Qingdao NovelBeam TechnologyLtd.
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 Qingdao NovelBeam 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 Qingdao NovelBeam TechnologyLtd going out to 2025, and you can see them 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.