Cambricon Technologies Corporation Limited (SHSE:688256) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals. The stock price has risen 5.8% to CN¥171 over the past week, suggesting investors are becoming more optimistic. Whether the upgrade is enough to drive the stock price higher is yet to be seen, however.
Following the upgrade, the most recent consensus for Cambricon Technologies from its five analysts is for revenues of CN¥1.7b in 2024 which, if met, would be a substantial 158% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 39% to CN¥1.19 per share. Yet before this consensus update, the analysts had been forecasting revenues of CN¥1.4b and losses of CN¥1.37 per share in 2024. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to this year's revenue estimates, while at the same time reducing their loss estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cambricon Technologies' past performance and to peers in the same industry. The analysts are definitely expecting Cambricon Technologies' growth to accelerate, with the forecast 254% annualised growth to the end of 2024 ranking favourably alongside historical growth of 7.3% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Cambricon Technologies to grow faster than the wider industry.
The Bottom Line
The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Cambricon Technologies is moving incrementally towards profitability. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. More bullish expectations could be a signal for investors to take a closer look at Cambricon Technologies.
Better yet, Cambricon Technologies is expected to break-even soon - within the next few years - according to analyst forecasts, which would be a momentous event for shareholders. You can learn more about these forecasts, for free on our platform here.
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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.