The analysts covering Jiangshan Oupai Door Industry Co., Ltd (SHSE:603208) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Jiangshan Oupai Door Industry from its seven analysts is for revenues of CN¥4.2b in 2024 which, if met, would be a meaningful 14% increase on its sales over the past 12 months. Statutory earnings per share are presumed to jump 20% to CN¥2.54. Prior to this update, the analysts had been forecasting revenues of CN¥4.7b and earnings per share (EPS) of CN¥2.77 in 2024. It looks like analyst sentiment has fallen somewhat in this update, with a measurable cut to revenue estimates and a minor downgrade to earnings per share numbers as well.

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. We can infer from the latest estimates that forecasts expect a continuation of Jiangshan Oupai Door Industry'shistorical trends, as the 14% annualised revenue growth to the end of 2024 is roughly in line with the 15% annual revenue growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So although Jiangshan Oupai Door Industry is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

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 Jiangshan Oupai Door Industry. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Jiangshan Oupai Door Industry after today.

Uncomfortably, our automated valuation tool also suggests that Jiangshan Oupai Door Industry stock could be overvalued following the downgrade. Shareholders could be left disappointed if these estimates play out. You can learn more about our valuation methodology 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 downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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