The analysts covering Primarius Technologies Co., Ltd. (SHSE:688206) 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) estimates were cut sharply as the analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from Primarius Technologies' three analysts is for revenues of CN¥430m in 2024, which would reflect a sizeable 31% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 54% to CN¥0.06 per share. Previously, the analysts had been modelling revenues of CN¥497m and earnings per share (EPS) of CN¥0.055 in 2024. So we can see that the consensus has become notably more bearish on Primarius Technologies' outlook with these numbers, making a measurable cut to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

The consensus price target fell 27% to CN¥19.74, implicitly signalling that lower earnings per share are a leading indicator for Primarius Technologies' valuation.

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. We can infer from the latest estimates that forecasts expect a continuation of Primarius Technologies'historical trends, as the 31% annualised revenue growth to the end of 2024 is roughly in line with the 28% annual revenue growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 22% per year. So it's pretty clear that Primarius Technologies is forecast to grow substantially faster than its industry.

The Bottom Line

The biggest low-light for us was that the forecasts for Primarius Technologies dropped from profits to a loss this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Primarius Technologies.

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 Primarius Technologies going out to 2026, 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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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.