The analysts covering QuantaSing Group Limited (NASDAQ:QSG) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Revenue estimates were cut sharply as the analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the latest downgrade, the dual analysts covering QuantaSing Group provided consensus estimates of CN¥2.7b revenue in 2025, which would reflect a stressful 27% decline on its sales over the past 12 months. Statutory earnings per share are supposed to crater 78% to CN¥1.69 in the same period. Before this latest update, the analysts had been forecasting revenues of CN¥3.6b and earnings per share (EPS) of CN¥1.73 in 2025. It looks like analyst sentiment has fallen somewhat in this update, with a sizeable cut to revenue estimates and a small dip in earnings per share numbers as well.

See our latest analysis for QuantaSing Group

Analysts made no major changes to their price target of CN¥26.17, suggesting the downgrades are not expected to have a long-term impact on QuantaSing Group's valuation. 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. Currently, the most bullish analyst values QuantaSing Group at CN¥39.89 per share, while the most bearish prices it at CN¥12.46. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how think this business will perform. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 34% by the end of 2025. This indicates a significant reduction from annual growth of 14% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 10% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - QuantaSing Group is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that QuantaSing Group's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of QuantaSing Group going forwards.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for QuantaSing Group going out as far as 2026, and you can see them free on our platform here.

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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.