Investors in EC Healthcare (HKG:2138) had a good week, as its shares rose 4.9% to close at HK$7.89 following the release of its full-year results. Statutory earnings per share fell badly short of expectations, coming in at HK$0.17, some 44% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at HK$2.9b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for EC Healthcare

Following the latest results, EC Healthcare's seven analysts are now forecasting revenues of HK$3.76b in 2023. This would be a sizeable 29% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to leap 140% to HK$0.40. Yet prior to the latest earnings, the analysts had been anticipated revenues of HK$3.77b and earnings per share (EPS) of HK$0.42 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at HK$13.55, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. 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. Currently, the most bullish analyst values EC Healthcare at HK$22.40 per share, while the most bearish prices it at HK$9.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the EC Healthcare's past performance and to peers in the same industry. It's clear from the latest estimates that EC Healthcare's rate of growth is expected to accelerate meaningfully, with the forecast 29% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 18% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect EC Healthcare to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for EC Healthcare. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple EC Healthcare analysts - going out to 2025, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with EC Healthcare , and understanding it should be part of your investment process.

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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.