InnoCare Pharma Limited (HKG:9969) defied analyst predictions to release its half-yearly results, which were ahead of market expectations. InnoCare Pharma outperformed estimates, with revenues of CN¥417m beating estimates by 15%. Statutory losses were CN¥0.16, 24% smaller thanthe analysts expected. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from InnoCare Pharma's seven analysts is for revenues of CN¥954.6m in 2024. This would reflect a substantial 22% increase on its revenue over the past 12 months. Losses are forecast to balloon 29% to CN¥0.35 per share. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥909.9m and losses of CN¥0.42 per share in 2024. So it seems there's been a definite increase in optimism about InnoCare Pharma's future following the latest consensus numbers, with a notable improvement in the loss per share forecasts in particular.
Despite these upgrades,the analysts have not made any major changes to their price target of HK$8.79, implying that their latest estimates don't have a long term impact on what they think the stock is worth. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic InnoCare Pharma analyst has a price target of HK$13.67 per share, while the most pessimistic values it at HK$5.90. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 49% growth on an annualised basis. That is in line with its 43% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 24% per year. So although InnoCare Pharma is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at HK$8.79, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple InnoCare Pharma analysts - going out to 2026, and you can see them free on our platform here.
And what about risks? Every company has them, and we've spotted 1 warning sign for InnoCare Pharma you should know about.
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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.
