Today is shaping up negative for Integrity Technology Group Inc. (SHSE:688244) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the downgrade, the current consensus from Integrity Technology Group's twin analysts is for revenues of CN¥506m in 2024 which - if met - would reflect a substantial 27% increase on its sales over the past 12 months. Per-share earnings are expected to leap 116% to CN¥0.87. Prior to this update, the analysts had been forecasting revenues of CN¥637m and earnings per share (EPS) of CN¥1.79 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.
Analysts made no major changes to their price target of CN¥63.04, suggesting the downgrades are not expected to have a long-term impact on Integrity Technology Group's valuation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Integrity Technology Group's rate of growth is expected to accelerate meaningfully, with the forecast 27% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 20% over the past year. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Integrity Technology Group to grow faster than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Integrity Technology Group. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Integrity Technology Group.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At least one analyst has provided forecasts out to 2026, which can be seen for 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 with high insider ownership.
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