The latest analyst coverage could presage a bad day for Yestar Healthcare Holdings Company Limited (HKG:2393), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Shares are up 4.4% to HK$0.71 in the past week. We'd be curious to see if the downgrade is enough to reverse investor sentiment on the business.

Following the downgrade, the consensus from single analyst covering Yestar Healthcare Holdings is for revenues of CN¥4.3b in 2022, implying a measurable 6.1% decline in sales compared to the last 12 months. Before the latest update, the analyst was foreseeing CN¥5.2b of revenue in 2022. The consensus view seems to have become more pessimistic on Yestar Healthcare Holdings, noting the substantial drop in revenue estimates in this update.

Check out our latest analysis for Yestar Healthcare Holdings

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 6.1% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 4.3% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 39% annually for the foreseeable future. It's pretty clear that Yestar Healthcare Holdings' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analyst cut their revenue estimates for this year. They also expect company revenue to perform worse than 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 Yestar Healthcare Holdings after today.

Thirsting for more data? We have forecasts for Yestar Healthcare Holdings from one covering analyst, 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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