Shareholders of Beauty Farm Medical and Health Industry Inc. (HKG:2373) will be pleased this week, given that the stock price is up 11% to HK$15.46 following its latest yearly results. It looks like the results were a bit of a negative overall. While revenues of CN¥2.1b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.1% to hit CN¥0.94 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Beauty Farm Medical and Health Industry after the latest results.
Taking into account the latest results, the consensus forecast from Beauty Farm Medical and Health Industry's eight analysts is for revenues of CN¥2.69b in 2024. This reflects a major 25% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to soar 37% to CN¥1.26. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.65b and earnings per share (EPS) of CN¥1.28 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
It will come as no surprise then, to learn that the consensus price target is largely unchanged at HK$20.02. 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. There are some variant perceptions on Beauty Farm Medical and Health Industry, with the most bullish analyst valuing it at HK$27.65 and the most bearish at HK$12.93 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
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. It's clear from the latest estimates that Beauty Farm Medical and Health Industry's rate of growth is expected to accelerate meaningfully, with the forecast 25% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 10% p.a. over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 16% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Beauty Farm Medical and Health Industry to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is 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.
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 Beauty Farm Medical and Health Industry going out to 2026, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months 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.