Some GCL Technology Holdings Limited (HKG:3800) Analysts Just Made A Major Cut To Next Year's Estimates

The analysts covering GCL Technology Holdings Limited (HKG:3800) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

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Following the downgrade, the current consensus from GCL Technology Holdings' eleven analysts is for revenues of CN¥19b in 2025 which - if met - would reflect a substantial 23% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 90% to CN¥0.016. Previously, the analysts had been modelling revenues of CN¥24b and earnings per share (EPS) of CN¥0.024 in 2025. So we can see that the consensus has become notably more bearish on GCL Technology Holdings' outlook with these numbers, making a pretty serious reduction to this year's revenue estimates. Furthermore, they expect the business to be loss-making this year, compared to their previous forecasts of a profit.

See our latest analysis for GCL Technology Holdings

The consensus price target fell 12% to CN¥1.39, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic GCL Technology Holdings analyst has a price target of CN¥1.87 per share, while the most pessimistic values it at CN¥1.00. This is a fairly broad spread of estimates, suggesting that the analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the GCL Technology Holdings' past performance and to peers in the same industry. The analysts are definitely expecting GCL Technology Holdings' growth to accelerate, with the forecast 23% annualised growth to the end of 2025 ranking favourably alongside historical growth of 11% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 13% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that GCL Technology Holdings is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that analysts are expecting GCL Technology Holdings to become unprofitable this year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of GCL Technology Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for GCL Technology Holdings going out to 2027, 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 with high insider ownership.

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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.