Johnson Health Tech. Co., Ltd. (TPE:1736) shareholders are probably feeling a little disappointed, since its shares fell 4.0% to NT$63.10 in the week after its latest first-quarter results. Revenues came in at NT$5.5b, in line with estimates, while Johnson Health Tech reported a statutory loss of NT$0.83 per share, well short of prior analyst forecasts for a profit. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the most recent consensus for Johnson Health Tech from three analysts is for revenues of NT$27.4b in 2020 which, if met, would be a reasonable 7.3% increase on its sales over the past 12 months. Per-share earnings are expected to soar 79% to NT$5.92. In the lead-up to this report, the analysts had been modelling revenues of NT$27.6b and earnings per share (EPS) of NT$5.86 in 2020. So it’s pretty clear that, although the analysts have updated their estimates, there’s been no major change in expectations for the business following the latest results.
The consensus price target rose 14% to NT$91.50 despite there being no meaningful change to earnings estimates. It could be that the analystsare reflecting the predictability of Johnson Health Tech’s earnings by assigning a price premium. 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. There are some variant perceptions on Johnson Health Tech, with the most bullish analyst valuing it at NT$115 and the most bearish at NT$68.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Johnson Health Tech’shistorical trends, as next year’s 7.3% revenue growth is roughly in line with 8.4% annual revenue 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 2.5% per year. So although Johnson Health Tech is expected to maintain its revenue growth rate, it’s definitely expected to grow faster 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 analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates – from multiple Johnson Health Tech analysts – going out to 2022, and you can see them free on our platform here.
We don’t want to rain on the parade too much, but we did also find 3 warning signs for Johnson Health Tech (2 make us uncomfortable!) that you need to be mindful of.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.