Today is shaping up negative for XTC New Energy Materials(Xiamen) Co.,Ltd. (SHSE:688778) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the downgrade, the current consensus from XTC New Energy Materials(Xiamen)Ltd's four analysts is for revenues of CN¥20b in 2024 which - if met - would reflect a decent 18% increase on its sales over the past 12 months. Per-share earnings are expected to jump 66% to CN¥2.06. Before this latest update, the analysts had been forecasting revenues of CN¥22b and earnings per share (EPS) of CN¥2.41 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a considerable drop in earnings per share numbers as well.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of XTC New Energy Materials(Xiamen)Ltd'shistorical trends, as the 18% annualised revenue growth to the end of 2024 is roughly in line with the 16% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 18% annually. It's clear that while XTC New Energy Materials(Xiamen)Ltd's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with 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 XTC New Energy Materials(Xiamen)Ltd. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. After a cut like that, investors could be forgiven for thinking analysts are a lot more bearish on XTC New Energy Materials(Xiamen)Ltd, and a few readers might choose to steer clear of the stock.

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 XTC New Energy Materials(Xiamen)Ltd going out to 2026, 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.