The latest analyst coverage could presage a bad day for PAX Global Technology Limited (HKG:327), 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 analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the latest downgrade, PAX Global Technology's dual analysts currently expect revenues in 2024 to be HK$6.2b, approximately in line with the last 12 months. Statutory earnings per share are presumed to increase 4.1% to HK$0.94. Before this latest update, the analysts had been forecasting revenues of HK$7.5b and earnings per share (EPS) of HK$1.20 in 2024. Indeed, we can see that the analysts are a lot more bearish about PAX Global Technology's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

The consensus price target fell 28% to HK$6.49, with the weaker earnings outlook clearly leading analyst valuation estimates.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that PAX Global Technology's revenue growth is expected to slow, with the forecast 0.4% annualised growth rate until the end of 2024 being well below the historical 8.1% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 12% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than PAX Global Technology.

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 PAX Global Technology. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of PAX Global Technology.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for PAX Global Technology going out as far as 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 backed by insiders.

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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.