One thing we could say about the analysts on Jianpu Technology Inc. (NYSE:JT) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. 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 Jianpu Technology from its three analysts is for revenues of CN¥2.5b in 2020 which, if met, would be a substantial 51% increase on its sales over the past 12 months. Before the latest update, the analysts were foreseeing CN¥2.9b of revenue in 2020. The consensus view seems to have become more pessimistic on Jianpu Technology, noting the substantial drop in revenue estimates in this update.
The consensus price target fell 74% to CN¥7.32, with the analysts clearly less optimistic about Jianpu Technology's valuation following this update. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Jianpu Technology, with the most bullish analyst valuing it at CN¥7.64 and the most bearish at CN¥6.99 per share. With such a narrow range of valuations, analysts apparently share similar views on what they think the business is worth.
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 Jianpu Technology's rate of growth is expected to accelerate meaningfully, with the forecast 51% revenue growth noticeably faster than its historical growth of 41% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.1% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Jianpu Technology is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that analysts cut their revenue estimates for this year. The analysts also expect revenues to grow faster than the wider market. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Jianpu Technology's future valuation. Given the stark change in sentiment, we'd understand if investors became more cautious on Jianpu Technology after today.
Of course, this isn't the full story. We have estimates for Jianpu Technology from its three analysts out until 2021, 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 that insiders are buying.
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