Walvax Biotechnology Co., Ltd. (SZSE:300142) just released its latest quarterly report and things are not looking great. The analysts look to have been far too optimistic in the lead-up to these results, with revenues of (CN¥834m) coming in 43% below what they had expected. Statutory earnings per share of CN¥0.10 fell 60% short. 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 collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the consensus forecast from Walvax Biotechnology's dual analysts is for revenues of CN¥3.48b in 2024. This reflects an okay 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 243% to CN¥0.29. Before this earnings report, the analysts had been forecasting revenues of CN¥4.13b and earnings per share (EPS) of CN¥0.49 in 2024. Indeed, we can see that the analysts are a lot more bearish about Walvax Biotechnology's prospects following the latest results, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.
It'll come as no surprise then, to learn that the analysts have cut their price target 5.6% to CN¥17.00.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Walvax Biotechnology's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.2% growth on an annualised basis. This is compared to a historical growth rate of 24% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 24% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Walvax Biotechnology.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. 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.
With that in mind, we wouldn't be too quick to come to a conclusion on Walvax Biotechnology. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2026, which can be seen for free on our platform here.
You still need to take note of risks, for example - Walvax Biotechnology has 2 warning signs we think you should be aware of.
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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.
