It's shaping up to be a tough period for Aier Eye Hospital Group Co., Ltd. (SZSE:300015), which a week ago released some disappointing quarterly results that could have a notable impact on how the market views the stock. Earnings fell badly short of analyst estimates, with CN¥5.2b revenues missing by 18%, and statutory earnings per share (EPS) of CN¥0.097 falling short of forecasts by some -17%. 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.
Taking into account the latest results, the consensus forecast from Aier Eye Hospital Group's 19 analysts is for revenues of CN¥22.8b in 2024. This reflects a decent 11% improvement in revenue compared to the last 12 months. Per-share earnings are expected to climb 12% to CN¥0.42. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥25.4b and earnings per share (EPS) of CN¥0.47 in 2024. Indeed, we can see that the analysts are a lot more bearish about Aier Eye Hospital Group's prospects following the latest results, administering a real cut to revenue estimates and slashing their EPS estimates to boot.
The consensus price target fell 15% to CN¥19.84, with the weaker earnings outlook clearly leading valuation estimates. 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. The most optimistic Aier Eye Hospital Group analyst has a price target of CN¥31.87 per share, while the most pessimistic values it at CN¥13.50. 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. We can infer from the latest estimates that forecasts expect a continuation of Aier Eye Hospital Group'shistorical trends, as the 15% annualised revenue growth to the end of 2024 is roughly in line with the 17% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. It's clear that while Aier Eye Hospital Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Aier Eye Hospital Group. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Aier Eye Hospital Group's future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Aier Eye Hospital Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Aier Eye Hospital Group going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Aier Eye Hospital Group , and understanding this should be part of your investment process.
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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.