One thing we could say about the analysts on HitGen Inc. (SHSE:688222) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business. The stock price has risen 8.4% to CN¥15.66 over the past week. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

After the downgrade, the consensus from HitGen's dual analysts is for revenues of CN¥340m in 2023, which would reflect a discernible 4.9% decline in sales compared to the last year of performance. Statutory earnings per share are anticipated to shrink 9.6% to CN¥0.075 in the same period. Previously, the analysts had been modelling revenues of CN¥384m and earnings per share (EPS) of CN¥0.095 in 2023. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a pretty serious decline to earnings per share numbers as well.

See our latest analysis for HitGen

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the HitGen's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 4.9% by the end of 2023. This indicates a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 20% per year. It's pretty clear that HitGen's revenues are expected to perform substantially worse 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 HitGen. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that HitGen's revenues are expected to grow slower than the wider market. Given the serious cut to this year's outlook, it's clear that analysts have turned more bearish on HitGen, and we wouldn't blame shareholders for feeling a little more cautious themselves.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have analyst estimates for HitGen going out as far as 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.

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