The analysts covering Tellgen Corporation (SZSE:300642) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

After this downgrade, Tellgen's twin analysts are now forecasting revenues of CN¥812m in 2022. This would be a decent 19% improvement in sales compared to the last 12 months. Per-share earnings are expected to bounce 21% to CN¥1.06. Previously, the analysts had been modelling revenues of CN¥974m and earnings per share (EPS) of CN¥1.67 in 2022. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Tellgen

It'll come as no surprise then, to learn that the analysts have cut their price target 13% to CN¥45.00.

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 clear from the latest estimates that Tellgen's rate of growth is expected to accelerate meaningfully, with the forecast 26% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 20% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Tellgen to grow faster than 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 Tellgen. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Tellgen going out as far as 2024, 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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