Last week, you might have seen that Ping An Healthcare and Technology Company Limited (HKG:1833) released its interim result to the market. The early response was not positive, with shares down 8.9% to HK$10.00 in the past week. 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.

Following last week's earnings report, Ping An Healthcare and Technology's twelve analysts are forecasting 2024 revenues to be CN¥4.55b, approximately in line with the last 12 months. Earnings are expected to improve, with Ping An Healthcare and Technology forecast to report a statutory profit of CN¥0.093 per share. Before this latest report, the consensus had been expecting revenues of CN¥5.26b and CN¥0.14 per share in losses. So it's pretty clear that although the analysts have made a substantial drop in to their revenue estimates, the business is expected to reach profitability earlier, after the latest results.

The analysts have cut their price target 6.2% to HK$16.50per share, suggesting that the declining revenue was a more crucial indicator than the expected improvement in earnings. 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 Ping An Healthcare and Technology at HK$35.14 per share, while the most bearish prices it at HK$10.00. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2024. Historically, Ping An Healthcare and Technology's top line has shrunk approximately 1.5% annually over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 10% annually. Although Ping An Healthcare and Technology's revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been a clear step-change in belief around the business' prospects, with the analysts now expecting Ping An Healthcare and Technology to become profitable next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Still, earnings per share are more important to value creation for shareholders. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

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 Ping An Healthcare and Technology analysts - going out to 2026, and you can see them free on our platform here.

You can also see our analysis of Ping An Healthcare and Technology's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

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.