The latest analyst coverage could presage a bad day for Ming Yang Smart Energy Group Limited (SHSE:601615), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. 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. At CN¥10.65, shares are up 8.6% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the current consensus from Ming Yang Smart Energy Group's eight analysts is for revenues of CN¥43b in 2024 which - if met - would reflect a huge 43% increase on its sales over the past 12 months. Statutory earnings per share are presumed to bounce 181% to CN¥1.18. Prior to this update, the analysts had been forecasting revenues of CN¥49b and earnings per share (EPS) of CN¥1.62 in 2024. Indeed, we can see that the analysts are a lot more bearish about Ming Yang Smart Energy Group's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 5.3% to CN¥16.23, 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. It's clear from the latest estimates that Ming Yang Smart Energy Group's rate of growth is expected to accelerate meaningfully, with the forecast 62% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 22% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 17% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Ming Yang Smart Energy Group is expected to grow much faster than its 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. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to 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 Ming Yang Smart Energy Group.

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 Ming Yang Smart Energy Group 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.