Celebrations may be in order for Yijiahe Technology Co., Ltd. (SHSE:603666) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The consensus statutory numbers for both revenue and earnings per share (EPS) increased, with their view clearly much more bullish on the company's business prospects.

Following the upgrade, the current consensus from Yijiahe Technology's twin analysts is for revenues of CN¥710m in 2023 which - if met - would reflect a major 54% increase on its sales over the past 12 months. Losses are expected to turn into profits real soon, with the analysts forecasting CN¥0.008 in per-share earnings. Yet before this consensus update, the analysts had been forecasting revenues of CN¥590m and losses of CN¥0.21 per share in 2023. So we can see that this has sparked a pretty clear upgrade to expectations, with higher revenues anticipated to lead to profit sooner than previously forecast.

Despite these upgrades, the analysts have not made any major changes to their price target of CN¥29.72, suggesting that the higher estimates are not likely to have a long term impact on what the stock 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. The analysts are definitely expecting Yijiahe Technology's growth to accelerate, with the forecast 137% annualised growth to the end of 2023 ranking favourably alongside historical growth of 7.7% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 18% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Yijiahe Technology is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away from this upgrade is that there is now an expectation for Yijiahe Technology to become profitable this year, compared to previous expectations of a loss. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Yijiahe Technology.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At least one analyst has provided forecasts out to 2025, 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.