As you might know, Gan & Lee Pharmaceuticals. (SHSE:603087) last week released its latest quarterly, and things did not turn out so great for shareholders. Unfortunately, Gan & Lee Pharmaceuticals delivered a serious earnings miss. Revenues of CN¥560m were 14% below expectations, and statutory earnings per share of CN¥0.16 missed estimates by 30%. 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 Gan & Lee Pharmaceuticals after the latest results.
Taking into account the latest results, the current consensus from Gan & Lee Pharmaceuticals' three analysts is for revenues of CN¥3.87b in 2024. This would reflect a sizeable 48% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 88% to CN¥1.23. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.28b and earnings per share (EPS) of CN¥1.08 in 2024. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.
Despite these upgrades,the analysts have not made any major changes to their price target of CN¥58.00, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. 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. The most optimistic Gan & Lee Pharmaceuticals analyst has a price target of CN¥62.00 per share, while the most pessimistic values it at CN¥54.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Of course, another way to look at these forecasts is to place them into context against the industry itself. For example, we noticed that Gan & Lee Pharmaceuticals' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 69% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 20% a year over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 22% annually. So it looks like Gan & Lee Pharmaceuticals is expected to grow faster than its competitors, at least for a while.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Gan & Lee Pharmaceuticals following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at CN¥58.00, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Gan & Lee Pharmaceuticals. Long-term earnings power is much more important than next year's profits. We have forecasts for Gan & Lee Pharmaceuticals going out to 2026, and you can see them free on our platform here.
Even so, be aware that Gan & Lee Pharmaceuticals is showing 1 warning sign in our investment analysis , you should know about...
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.