Today is shaping up negative for Valuetronics Holdings Limited (SGX:BN2) shareholders, with the analysts delivering a substantial negative revision to this year's forecasts. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.

Following the downgrade, the most recent consensus for Valuetronics Holdings from its two analysts is for revenues of HK$1.8b in 2025 which, if met, would be a modest 5.2% increase on its sales over the past 12 months. Statutory earnings per share are presumed to increase 2.4% to HK$0.40. Before this latest update, the analysts had been forecasting revenues of HK$2.0b and earnings per share (EPS) of HK$0.40 in 2025. Indeed we can see that the consensus opinion has undergone some fundamental changes following the recent consensus updates, with a measurable cut to revenues and some minor tweaks to earnings numbers.

See our latest analysis for Valuetronics Holdings

The consensus has reconfirmed its price target of HK$3.81, showing that the analysts don't expect weaker sales expectationsthis year to have a material impact on Valuetronics Holdings' market value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Valuetronics Holdings, with the most bullish analyst valuing it at HK$4.40 and the most bearish at HK$2.90 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Valuetronics Holdings shareholders.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Valuetronics Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 5.2% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 8.7% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 13% per year. So although Valuetronics Holdings' revenue growth is expected to improve, it is still expected to grow slower than the industry.

The Bottom Line

The most obvious conclusion from this consensus update is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Valuetronics Holdings going forwards.