The latest analyst coverage could presage a bad day for RISE Education Cayman Ltd (NASDAQ:REDU), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the dual analysts covering RISE Education Cayman provided consensus estimates of CN¥992m revenue in 2020, which would reflect a substantial 24% decline on its sales over the past 12 months. Following this this downgrade, earnings are now expected to tip over into loss-making territory, with the analysts forecasting losses of CN¥2.06 per share in 2020. Prior to this update, the analysts had been forecasting revenues of CN¥1.1b and earnings per share (EPS) of CN¥2.43 in 2020. So we can see that the consensus has become notably more bearish on RISE Education Cayman's outlook with these numbers, making a substantial drop in 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 RISE Education Cayman

The consensus price target fell 35% to CN¥29.49, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic RISE Education Cayman analyst has a price target of CN¥30.57 per share, while the most pessimistic values it at CN¥28.41. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast revenue decline of 24%, a significant reduction from annual growth of 21% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 21% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - RISE Education Cayman is expected to lag the wider industry.