The analysts covering Intron Technology Holdings Limited (HKG:1760) 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, Intron Technology Holdings' three analysts are now forecasting revenues of CN¥6.9b in 2024. This would be a notable 18% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 22% to CN¥0.35. Previously, the analysts had been modelling revenues of CN¥8.0b and earnings per share (EPS) of CN¥0.54 in 2024. Indeed, we can see that the analysts are a lot more bearish about Intron Technology Holdings' prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 11% to CN¥4.72, with the weaker earnings outlook clearly leading analyst valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Intron Technology Holdings, with the most bullish analyst valuing it at CN¥5.69 and the most bearish at CN¥3.87 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Intron Technology Holdings' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Intron Technology Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 18% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 11% per year. So it's pretty clear that, while Intron Technology Holdings' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.
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 Intron Technology Holdings. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will 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.
As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Intron Technology Holdings' financials, such as its declining profit margins. For more information, you can click here to discover this and the 3 other flags we've identified.
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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.