The latest analyst coverage could presage a bad day for Qingdao Haier Biomedical Co.,Ltd (SHSE:688139), 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) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.
Following the downgrade, the current consensus from Qingdao Haier BiomedicalLtd's four analysts is for revenues of CN¥2.9b in 2023 which - if met - would reflect a solid 10% increase on its sales over the past 12 months. Statutory earnings per share are presumed to shoot up 21% to CN¥1.91. Previously, the analysts had been modelling revenues of CN¥3.3b and earnings per share (EPS) of CN¥2.26 in 2023. Indeed, we can see that the analysts are a lot more bearish about Qingdao Haier BiomedicalLtd's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
See our latest analysis for Qingdao Haier BiomedicalLtd
The consensus price target fell 8.4% to CN¥72.83, with the weaker earnings outlook clearly leading analyst valuation 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 Qingdao Haier BiomedicalLtd's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2023 being well below the historical 28% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 20% per year. Factoring in the forecast slowdown in growth, it seems obvious that Qingdao Haier BiomedicalLtd is also expected to grow slower than other industry participants.
The Bottom Line
The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Qingdao Haier BiomedicalLtd. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Qingdao Haier BiomedicalLtd's revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Qingdao Haier BiomedicalLtd.
Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Qingdao Haier BiomedicalLtd going out to 2025, and you can see them free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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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.