One thing we could say about the analysts on EVE Energy Co., Ltd. (SZSE:300014) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
After this downgrade, EVE Energy's 19 analysts are now forecasting revenues of CN¥57b in 2024. This would be a meaningful 19% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to accumulate 2.2% to CN¥2.13. Prior to this update, the analysts had been forecasting revenues of CN¥64b and earnings per share (EPS) of CN¥2.66 in 2024. Indeed, we can see that the analysts are a lot more bearish about EVE Energy's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
Despite the cuts to forecast earnings, there was no real change to the CN¥48.54 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EVE Energy's past performance and to peers in the same industry. We would highlight that EVE Energy's revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2024 being well below the historical 50% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 18% annually. So it's pretty clear that, while EVE Energy's revenue growth is expected to slow, it's expected to grow roughly in line with the 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 EVE Energy. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of EVE Energy.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for EVE Energy going out to 2025, 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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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.