It's been a good week for Vincent Medical Holdings Limited (HKG:1612) shareholders, because the company has just released its latest yearly results, and the shares gained 5.3% to HK$0.40. Results look mixed - while revenue fell marginally short of analyst estimates at HK$718m, statutory earnings beat expectations 9.5%, with Vincent Medical Holdings reporting profits of HK$0.089 per share. Following the result, the analyst has 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analyst has changed their mind on Vincent Medical Holdings after the latest results.

Taking into account the latest results, the consensus forecast from Vincent Medical Holdings' single analyst is for revenues of HK$834.1m in 2024. This reflects a decent 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 8.4% to HK$0.095. Before this earnings report, the analyst had been forecasting revenues of HK$871.0m and earnings per share (EPS) of HK$0.094 in 2024. The consensus seems maybe a little more pessimistic, trimming their revenue forecasts after the latest results even though there was no change to its EPS estimates.

The average price target was reduced 31% to HK$0.66, with the lower revenue forecasts indicating negative sentiment towards Vincent Medical Holdings, even though earnings forecasts were unchanged.

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 clear from the latest estimates that Vincent Medical Holdings' rate of growth is expected to accelerate meaningfully, with the forecast 16% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 4.3% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 23% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Vincent Medical Holdings is expected to grow slower than the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analyst holding their earnings forecasts steady, in line with previous estimates. 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. Even so, long term profitability is more important for the value creation process. The consensus price target fell measurably, with the analyst seemingly not reassured by the latest results, leading to a lower estimate of Vincent Medical 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. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Vincent Medical Holdings you should know about.

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.