One thing we could say about the analysts on CanSino Biologics Inc. (HKG:6185) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) estimates were cut sharply as analysts factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the current consensus from CanSino Biologics' five analysts is for revenues of CN¥974m in 2024 which - if met - would reflect a major 94% increase on its sales over the past 12 months. Losses are predicted to fall substantially, shrinking 78% to CN¥1.24 per share. Before this latest update, the analysts had been forecasting revenues of CN¥1.6b and earnings per share (EPS) of CN¥1.15 in 2024. So we can see that the consensus has become notably more bearish on CanSino Biologics' outlook with these numbers, making a sizeable cut to next year's revenue estimates. Furthermore, they expect the business to be loss-making next year, compared to their previous forecasts of a profit.

Check out our latest analysis for CanSino Biologics

The consensus price target fell 54% to CN¥32.09, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic CanSino Biologics analyst has a price target of CN¥39.20 per share, while the most pessimistic values it at CN¥26.60. This shows there is still some diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The analysts are definitely expecting CanSino Biologics' growth to accelerate, with the forecast 70% annualised growth to the end of 2024 ranking favourably alongside historical growth of 41% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 32% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect CanSino Biologics to grow faster than the wider industry.

The Bottom Line

The biggest low-light for us was that the forecasts for CanSino Biologics dropped from profits to a loss next year. While analysts did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

There might be good reason for analyst bearishness towards CanSino Biologics, like the risk of cutting its dividend. For more information, you can click here to discover this and the 1 other flag we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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