The analyst covering Linmon Media Limited (HKG:9857) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the consensus from solitary analyst covering Linmon Media is for revenues of CN¥950m in 2024, implying a perceptible 4.2% decline in sales compared to the last 12 months. Per-share earnings are expected to shoot up 68% to CN¥0.14. Prior to this update, the analyst had been forecasting revenues of CN¥1.4b and earnings per share (EPS) of CN¥0.68 in 2024. Indeed, we can see that the analyst is a lot more bearish about Linmon Media's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analyst has cut their price target 51% to CN¥4.57.

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 sales are expected to reverse, with a forecast 4.2% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 11% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 15% annually for the foreseeable future. It's pretty clear that Linmon Media's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

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 Linmon Media going out as far as 2025, and you can see them 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.