The Consensus EPS Estimates For PC Partner Group Limited (HKG:1263) Just Fell A Lot
The latest analyst coverage could presage a bad day for PC Partner Group Limited (HKG:1263), with the covering analyst making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analyst seeing grey clouds on the horizon.
Following the latest downgrade, the current consensus, from the single analyst covering PC Partner Group, is for revenues of HK$6.8b in 2020, which would reflect an uneasy 9.5% reduction in PC Partner Group's sales over the past 12 months. Statutory earnings per share are presumed to jump 806% to HK$0.25. Prior to this update, the analyst had been forecasting revenues of HK$8.7b and earnings per share (EPS) of HK$0.42 in 2020. Indeed, we can see that the analyst is a lot more bearish about PC Partner Group's prospects, administering a sizeable cut to revenue estimates and slashing their EPS estimates to boot.
View our latest analysis for PC Partner Group
The consensus price target fell 41% to HK$1.30, with the weaker earnings outlook clearly leading analyst valuation estimates.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that sales are expected to reverse, with the forecast 9.5% revenue decline a notable change from historical growth of 14% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 13% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - PC Partner Group is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that the analyst cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately the analyst also downgraded their revenue estimates, and industry data suggests that PC Partner Group's revenues are expected to grow slower than 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 PC Partner Group.
So things certainly aren't looking great, and you should also know that we've spotted some potential warning signs with PC Partner Group, including its declining profit margins. Learn more, and discover the 4 other concerns we've identified, for 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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