Everest Medicines Limited (HKG:1952) shareholders are probably feeling a little disappointed, since its shares fell 3.7% to HK$23.50 in the week after its latest full-year results. Revenue greatly exceeded expectations at CN¥126m, some 25% ahead of analyst forecasts. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
After the latest results, the six analysts covering Everest Medicines are now predicting revenues of CN¥716.1m in 2024. If met, this would reflect a huge 469% improvement in revenue compared to the last 12 months. Before this earnings announcement, the analysts had been modelling revenues of CN¥691.1m and losses of CN¥2.37 per share in 2024. The thing that stands out most is that, while there's been a small increase to revenue estimates, the consensus no longer provides an EPS estimate. This impliesthat revenue is more important following the latest results.
We'd also point out that thatthe analysts have made no major changes to their price target of HK$27.08. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Everest Medicines, with the most bullish analyst valuing it at HK$39.98 and the most bearish at HK$23.25 per share. 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Everest Medicines' growth to accelerate, with the forecast 5x annualised growth to the end of 2024 ranking favourably alongside historical growth of 92% per annum 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 25% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Everest Medicines is expected to grow much faster than its industry.
The Bottom Line
The most important thing to take away is that the analysts upgraded their revenue estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at HK$27.08, with the latest estimates not enough to have an impact on their price targets.
At least one of Everest Medicines' six analysts has provided estimates out to 2026, which can be seen for free on our platform here.
However, before you get too enthused, we've discovered 2 warning signs for Everest Medicines that you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.