It's been a good week for Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. (SZSE:002223) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.3% to CN¥38.65. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥2.2b, statutory earnings were in line with expectations, at CN¥2.41 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the consensus forecast from Jiangsu Yuyue Medical Equipment & Supply's eight analysts is for revenues of CN¥8.72b in 2024. This reflects a solid 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to drop 10% to CN¥2.10 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥9.38b and earnings per share (EPS) of CN¥2.19 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The average price target climbed 5.3% to CN¥46.79despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. 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. Currently, the most bullish analyst values Jiangsu Yuyue Medical Equipment & Supply at CN¥51.30 per share, while the most bearish prices it at CN¥42.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
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 Jiangsu Yuyue Medical Equipment & Supply's rate of growth is expected to accelerate meaningfully, with the forecast 22% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 12% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Jiangsu Yuyue Medical Equipment & Supply is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Jiangsu Yuyue Medical Equipment & Supply going out to 2026, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Jiangsu Yuyue Medical Equipment & Supply that we have uncovered.
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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.