Today is shaping up negative for Triumph New Energy Company Limited (HKG:1108) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

Following the downgrade, the current consensus from Triumph New Energy's three analysts is for revenues of CN¥6.5b in 2024 which - if met - would reflect a solid 17% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing CN¥7.7b of revenue in 2024. The consensus view seems to have become more pessimistic on Triumph New Energy, noting the substantial drop in revenue estimates in this update.

We'd point out that there was no major changes to their price target of CN¥6.15, suggesting the latest estimates were not enough to shift their view on the value of the business. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Triumph New Energy analyst has a price target of CN¥7.00 per share, while the most pessimistic values it at CN¥5.31. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

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. It's pretty clear that there is an expectation that Triumph New Energy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 17% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.1% annually. Even after the forecast slowdown in growth, it seems obvious that Triumph New Energy is also expected to grow faster than the wider industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for Triumph New Energy this year. Analysts also expect revenues to grow faster than the wider market. Given the stark change in sentiment, we'd understand if investors became more cautious on Triumph New Energy after today.

Need some more information? We have estimates for Triumph New Energy from its three analysts out until 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 with high insider ownership.

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