Last week, you might have seen that OrbusNeich Medical Group Holdings Limited (HKG:6929) released its annual result to the market. The early response was not positive, with shares down 9.5% to HK$3.98 in the past week. It looks like a credible result overall - although revenues of US$154m were what the analysts expected, OrbusNeich Medical Group Holdings surprised by delivering a (statutory) profit of US$0.055 per share, an impressive 21% above what was forecast. 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.
Following the latest results, OrbusNeich Medical Group Holdings' three analysts are now forecasting revenues of US$177.7m in 2024. This would be a solid 15% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be US$0.055, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$176.4m and earnings per share (EPS) of US$0.053 in 2024. So the consensus seems to have become somewhat more optimistic on OrbusNeich Medical Group Holdings' earnings potential following these results.
The average the analysts price target fell 18% to HK$6.96, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. 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 OrbusNeich Medical Group Holdings at HK$8.01 per share, while the most bearish prices it at HK$5.81. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await OrbusNeich Medical Group Holdings shareholders.
Of course, another way to look at these forecasts is to place them into context against the industry itself. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 15% growth on an annualised basis. That is in line with its 17% annual growth over the past three years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 24% annually. So although OrbusNeich Medical Group Holdings is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around OrbusNeich Medical Group Holdings' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that OrbusNeich Medical Group Holdings' revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of OrbusNeich Medical Group Holdings' future valuation.
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 estimates - from multiple OrbusNeich Medical Group Holdings analysts - going out to 2026, and you can see them free on our platform here.
You can also see our analysis of OrbusNeich Medical Group Holdings' Board and CEO remuneration and experience, and whether company insiders have been buying stock.
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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.