The analysts covering Gresgying Digital Energy Technology Co.,Ltd (SHSE:600212) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the downgrade, the current consensus from Gresgying Digital Energy TechnologyLtd's three analysts is for revenues of CN¥1.3b in 2024 which - if met - would reflect a sizeable 106% increase on its sales over the past 12 months. Per-share earnings are expected to jump 740% to CN¥0.21. Previously, the analysts had been modelling revenues of CN¥1.8b and earnings per share (EPS) of CN¥0.29 in 2024. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

The consensus price target fell 8.6% to CN¥7.43, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Gresgying Digital Energy TechnologyLtd's growth to accelerate, with the forecast 106% annualised growth to the end of 2024 ranking favourably alongside historical growth of 11% 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 7.3% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Gresgying Digital Energy TechnologyLtd to grow faster than the wider industry.

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. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Gresgying Digital Energy TechnologyLtd.

There might be good reason for analyst bearishness towards Gresgying Digital Energy TechnologyLtd, like dilutive stock issuance over the past year. Learn more, and discover the 1 other risk we've identified, for free on our platform here.

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