The analysts covering Walvax Biotechnology Co., Ltd. (SZSE:300142) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Walvax Biotechnology's two analysts are now forecasting revenues of CN¥3.5b in 2024. This would be a modest 3.0% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to soar 244% to CN¥0.29. Before this latest update, the analysts had been forecasting revenues of CN¥4.1b and earnings per share (EPS) of CN¥0.49 in 2024. Indeed, we can see that the analysts are a lot more bearish about Walvax Biotechnology's prospects, administering a measurable cut to revenue estimates and slashing their EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 5.6% to CN¥17.00.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Walvax Biotechnology's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.2% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 25% annually. Factoring in the forecast slowdown in growth, it seems obvious that Walvax Biotechnology is also expected to grow slower than other industry participants.

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 Walvax Biotechnology. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Walvax Biotechnology's revenues are expected to grow slower 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 Walvax Biotechnology.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2026, which can be seen for 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.