It's been a good week for Zhejiang Starry Pharmaceutical Co.,Ltd. (SHSE:603520) shareholders, because the company has just released its latest full-year results, and the shares gained 9.5% to CN¥44.69. It was a pretty mixed result, with revenues beating expectations to hit CN¥2.0b. Statutory earnings fell 7.8% short of analyst forecasts, reaching CN¥1.32 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zhejiang Starry PharmaceuticalLtd after the latest results.

See our latest analysis for Zhejiang Starry PharmaceuticalLtd

Taking into account the latest results, the most recent consensus for Zhejiang Starry PharmaceuticalLtd from five analysts is for revenues of CN¥2.71b in 2022 which, if met, would be a sizeable 35% increase on its sales over the past 12 months. Statutory earnings per share are predicted to leap 51% to CN¥2.00. Before this earnings report, the analysts had been forecasting revenues of CN¥2.69b and earnings per share (EPS) of CN¥2.12 in 2022. 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 fell 23% to CN¥50.00, with the analysts clearly linking lower forecast earnings to the performance of the stock price. 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 Zhejiang Starry PharmaceuticalLtd at CN¥51.56 per share, while the most bearish prices it at CN¥48.43. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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 Zhejiang Starry PharmaceuticalLtd's rate of growth is expected to accelerate meaningfully, with the forecast 35% annualised revenue growth to the end of 2022 noticeably faster than its historical growth of 21% 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 16% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Zhejiang Starry PharmaceuticalLtd is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Zhejiang Starry PharmaceuticalLtd going out to 2024, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 3 warning signs for Zhejiang Starry PharmaceuticalLtd 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.