The analyst covering Cheetah Net Supply Chain Service Inc. (NASDAQ:CTNT) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously. Shares are up 6.5% to US$1.81 in the past week. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.
After the downgrade, the consensus from Cheetah Net Supply Chain Service's sole analyst is for revenues of US$33m in 2024, which would reflect an uneasy 15% decline in sales compared to the last year of performance. Per-share earnings are expected to shoot up 617% to US$0.05. Before this latest update, the analyst had been forecasting revenues of US$50m and earnings per share (EPS) of US$0.08 in 2024. Indeed, we can see that the analyst is a lot more bearish about Cheetah Net Supply Chain Service's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 20% to US$4.00, with the weaker earnings outlook clearly leading analyst valuation estimates.
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. We would highlight that sales are expected to reverse, with a forecast 15% annualised revenue decline to the end of 2024. That is a notable change from historical growth of 24% over the last three years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.4% per year. It's pretty clear that Cheetah Net Supply Chain Service's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Cheetah Net Supply Chain Service. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of Cheetah Net Supply Chain Service.
Still, the long-term prospects of the business are much more relevant than next year's earnings. 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 downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
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