One thing we could say about the analysts on Guizhou Space Appliance Co., LTD (SZSE:002025) - 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) forecasts went under the knife, suggesting analysts have soured majorly on the business.

After the downgrade, the five analysts covering Guizhou Space Appliance are now predicting revenues of CN¥6.2b in 2022. If met, this would reflect a huge 24% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 29% to CN¥1.39. Prior to this update, the analysts had been forecasting revenues of CN¥7.0b and earnings per share (EPS) of CN¥1.79 in 2022. Indeed, we can see that the analysts are a lot more bearish about Guizhou Space Appliance's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for Guizhou Space Appliance

It'll come as no surprise then, to learn that the analysts have cut their price target 22% to CN¥65.87. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Guizhou Space Appliance analyst has a price target of CN¥68.73 per share, while the most pessimistic values it at CN¥63.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's clear from the latest estimates that Guizhou Space Appliance's rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 23% annually. Guizhou Space Appliance is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

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. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Guizhou Space Appliance.

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 Guizhou Space Appliance going out to 2024, 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.