It's been a sad week for Alibaba Health Information Technology Limited (HKG:241), who've watched their investment drop 16% to HK$3.70 in the week since the company reported its full-year result. It looks like the results were pretty good overall. While revenues of CN¥21b were in line with analyst predictions, statutory losses were much smaller than expected, with Alibaba Health Information Technology losing CN¥0.02 per share. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Alibaba Health Information Technology after the latest results.

See our latest analysis for Alibaba Health Information Technology

Following the latest results, Alibaba Health Information Technology's 14 analysts are now forecasting revenues of CN¥25.1b in 2023. This would be a huge 22% improvement in sales compared to the last 12 months. Losses are forecast to balloon 28% to CN¥0.025 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥26.4b and losses of CN¥0.029 per share in 2023. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a favorable reduction in losses per share in particular.

The consensus price target fell 19% to HK$7.99, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Alibaba Health Information Technology at HK$14.32 per share, while the most bearish prices it at HK$4.26. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Alibaba Health Information Technology's revenue growth is expected to slow, with the forecast 22% annualised growth rate until the end of 2023 being well below the historical 48% p.a. growth over the last five years. Compare this to the 13 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 22% per year. So it's pretty clear that, while Alibaba Health Information Technology's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Sadly, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. With that said, earnings are more important to the long-term value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Alibaba Health Information Technology's future valuation.

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 Alibaba Health Information Technology going out to 2025, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 1 warning sign for Alibaba Health Information Technology you should know about.

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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.