Today is shaping up negative for Shenzhen Hopewind Electric Co., Ltd. (SHSE:603063) 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.

After this downgrade, Shenzhen Hopewind Electric's four analysts are now forecasting revenues of CN¥4.6b in 2024. This would be a major 26% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to shoot up 29% to CN¥1.39. Before this latest update, the analysts had been forecasting revenues of CN¥5.4b and earnings per share (EPS) of CN¥1.51 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a measurable cut to revenue estimates and a small dip in EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 14% to CN¥28.30.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Shenzhen Hopewind Electric's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 18% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Shenzhen Hopewind Electric is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Shenzhen Hopewind Electric's future valuation. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Shenzhen Hopewind Electric going forwards.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Shenzhen Hopewind Electric going out to 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 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.