Decline in revenue: here is the analyst forecast for Powerlong Real Estate Holdings Limited (HKG: 1238)

One thing we could say about the analysts on Powerlong Real Estate Holdings Limited (HKG:1238) – they are not optimistic, having just made a major negative revision of their short-term (statutory) forecast for the organization. This report has focused on revenue estimates, and it seems that the consensus view of the company has become much more conservative.

Following the latest downgrade, the eight analysts covering Powerlong Real Estate Holdings provided consensus revenue estimates of 34 billion yen in 2022, which would reflect a slight 7.0% drop in sales over the past 12 months. Prior to the latest update, analysts were forecasting 44 billion yen in revenue in 2022. It appears that the forecast has turned a little less optimistic for Powerlong Real Estate Holdings, given the fairly significant reduction in revenue estimates.

Check out our latest analysis for Powerlong Real Estate Holdings

SEHK: 1238 Earnings and Revenue Growth September 19, 2022

We point out that there were no major changes in their price target of CN¥2.97, suggesting that the latest estimates were not enough to alter their view of the company’s value. . This is not the only conclusion we can draw from this data, however, as some investors also like to take into account the discrepancy in estimates when evaluating analyst price targets. Currently, the most bullish analyst values ​​Powerlong Real Estate Holdings at CN¥8.82 per share, while the most bearish one values ​​it at CN¥0.69. With such a wide range of price targets, analysts are almost certainly betting on widely varying outcomes for the underlying activity. As a result, it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.

Looking now at the bigger picture, one way to understand these forecasts is to see how they compare to both past performance and industry growth estimates. We highlight that sales are expected to reverse, with an expected decline in annualized revenue of 14% through the end of 2022. This is a notable change from the historical growth of 21% over the past five last years. Compare that with our data, which suggests that other companies in the same industry should, overall, see revenue growth of 8.5% per year. It’s pretty clear that Powerlong Real Estate Holdings’ earnings are expected to perform significantly worse than the industry as a whole.

The essential

The most important thing to remember is that analysts have cut their revenue estimates for this year. They also anticipate slower revenue growth than the broader market. Given the dramatic change in sentiment, we would understand if investors became more cautious about Powerlong Real Estate Holdings after today.

That said, analysts may have good reason to be negative on Powerlong Real Estate Holdings, given its declining profit margins. Learn more and discover the other 3 risks we have identified, for free on our platform here.

Of course, see the management of the company invest large sums of money in a stock can be just as useful as knowing if analysts are lowering their estimates. So you can also search this free list of stocks that insiders buy.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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