The latest analyst coverage could presage a bad day for Guobo Electronics Co., Ltd. (SHSE:688375), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the current consensus from Guobo Electronics' six analysts is for revenues of CN¥4.3b in 2024 which - if met - would reflect a huge 21% increase on its sales over the past 12 months. Per-share earnings are expected to shoot up 25% to CN¥1.92. Before this latest update, the analysts had been forecasting revenues of CN¥4.9b and earnings per share (EPS) of CN¥2.00 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a small dip in earnings per share numbers as well.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Guobo Electronics' past performance and to peers in the same industry. It's clear from the latest estimates that Guobo Electronics' rate of growth is expected to accelerate meaningfully, with the forecast 21% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 0.3% over the past year. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 23% per year. Guobo Electronics is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the stark change in sentiment, we'd understand if investors became more cautious on Guobo Electronics after today.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Guobo Electronics analysts - going out to 2026, 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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