It's been a pretty great week for Amoy Diagnostics Co., Ltd. (SZSE:300685) shareholders, with its shares surging 16% to CN¥25.40 in the week since its latest quarterly results. Revenues CN¥305m disappointed slightly, at6.4% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of CN¥0.21 coming in 19% above what was anticipated. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Amoy Diagnostics' ten analysts is for revenues of CN¥1.54b in 2025. This reflects a sizeable 30% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 22% to CN¥0.98. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.55b and earnings per share (EPS) of CN¥0.97 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The consensus price target rose 7.0% to CN¥28.90despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Amoy Diagnostics' earnings by assigning a price premium. 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. There are some variant perceptions on Amoy Diagnostics, with the most bullish analyst valuing it at CN¥36.00 and the most bearish at CN¥23.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's clear from the latest estimates that Amoy Diagnostics' rate of growth is expected to accelerate meaningfully, with the forecast 24% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 13% p.a. over the past five years. Other similar companies in the industry (with analyst coverage) are also forecast to grow their revenue at 23% per year. Amoy Diagnostics 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 obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. 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 in mind, we wouldn't be too quick to come to a conclusion on Amoy Diagnostics. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Amoy Diagnostics analysts - 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 1 warning sign for Amoy Diagnostics 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.
