The analysts covering Moon Environment Technology Co.,Ltd. (SZSE:000811) 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) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the three analysts covering Moon Environment TechnologyLtd are now predicting revenues of CN¥8.2b in 2024. If met, this would reflect a notable 10.0% improvement in sales compared to the last 12 months. Per-share earnings are expected to swell 16% to CN¥0.99. Prior to this update, the analysts had been forecasting revenues of CN¥10b and earnings per share (EPS) of CN¥1.14 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 20% to CN¥14.56.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Moon Environment TechnologyLtd's past performance and to peers in the same industry. We would highlight that Moon Environment TechnologyLtd's revenue growth is expected to slow, with the forecast 10.0% annualised growth rate until the end of 2024 being well below the historical 16% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 19% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Moon Environment TechnologyLtd.

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. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Moon Environment TechnologyLtd's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Moon Environment TechnologyLtd.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Moon Environment TechnologyLtd going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies 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.