The analysts covering T&S Communications Co.,Ltd. (SZSE:300570) 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 analysts seeing grey clouds on the horizon.

Following the downgrade, the current consensus from T&S CommunicationsLtd's three analysts is for revenues of CN¥942m in 2023 which - if met - would reflect a notable 10% increase on its sales over the past 12 months. Statutory earnings per share are presumed to swell 12% to CN¥0.67. Previously, the analysts had been modelling revenues of CN¥1.1b and earnings per share (EPS) of CN¥0.81 in 2023. Indeed, we can see that the analysts are a lot more bearish about T&S CommunicationsLtd's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

See our latest analysis for T&S CommunicationsLtd

The consensus price target fell 15% to CN¥39.50, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that T&S CommunicationsLtd's rate of growth is expected to accelerate meaningfully, with the forecast 10% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 3.0% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 24% annually. It seems obvious that, while the future growth outlook is brighter than the recent past, T&S CommunicationsLtd is expected to grow slower than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for T&S CommunicationsLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that T&S CommunicationsLtd'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.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple T&S CommunicationsLtd analysts - going out to 2025, 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.