The latest analyst coverage could presage a bad day for Unigroup Guoxin Microelectronics Co., Ltd. (SZSE:002049), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the current consensus from Unigroup Guoxin Microelectronics' five analysts is for revenues of CN¥9.0b in 2024 which - if met - would reflect a decent 19% increase on its sales over the past 12 months. Per-share earnings are expected to jump 35% to CN¥4.06. Prior to this update, the analysts had been forecasting revenues of CN¥10b and earnings per share (EPS) of CN¥4.44 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a minor downgrade to EPS estimates to boot.

It'll come as no surprise then, to learn that the analysts have cut their price target 22% to CN¥83.08.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Unigroup Guoxin Microelectronics' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Unigroup Guoxin Microelectronics' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 19% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. Compare this to the 213 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. So it's pretty clear that, while Unigroup Guoxin Microelectronics' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

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. There was also a drop in their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Unigroup Guoxin Microelectronics going forwards.

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 Unigroup Guoxin Microelectronics 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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