It's been a pretty great week for CanSino Biologics Inc. (HKG:6185) shareholders, with its shares surging 14% to HK$28.30 in the week since its latest quarterly results. In addition to smashing expectations with revenues of CN¥264m, CanSino Biologics delivered a surprise statutory profit of CN¥0.01 per share, a notable improvement compared to analyst expectations of a loss. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Taking into account the latest results, the most recent consensus for CanSino Biologics from five analysts is for revenues of CN¥1.19b in 2025. If met, it would imply a substantial 59% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 92% to CN¥0.25. Yet prior to the latest earnings, the analysts had been forecasting revenues of CN¥1.17b and losses of CN¥0.12 per share in 2025. While next year's revenue estimates increased, there was also a considerable increase to loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

There was no major change to the consensus price target of HK$27.10, with growing revenues seemingly enough to offset the concern of growing losses. 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 CanSino Biologics at HK$38.00 per share, while the most bearish prices it at HK$21.13. 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.

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. It's clear from the latest estimates that CanSino Biologics' rate of growth is expected to accelerate meaningfully, with the forecast 45% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 7.8% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 29% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that CanSino Biologics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at HK$27.10, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on CanSino Biologics. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for CanSino Biologics going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with CanSino Biologics , and understanding it should be part of your investment process.

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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.