Earnings Update: Topchoice Medical Co., Inc. (SHSE:600763) Just Reported And Analysts Are Trimming Their Forecasts

Topchoice Medical Co., Inc. (SHSE:600763) just released its latest first-quarter report and things are not looking great. Topchoice Medical missed analyst forecasts, with revenues of CN¥708m and statutory earnings per share (EPS) of CN¥0.54, falling short by 4.5% and 3.6% respectively. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Topchoice Medical

After the latest results, the eleven analysts covering Topchoice Medical are now predicting revenues of CN¥3.10b in 2024. If met, this would reflect a satisfactory 7.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 12% to CN¥1.77. In the lead-up to this report, the analysts had been modelling revenues of CN¥3.48b and earnings per share (EPS) of CN¥2.35 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

It'll come as no surprise then, to learn that the analysts have cut their price target 9.0% to CN¥80.80. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Topchoice Medical at CN¥113 per share, while the most bearish prices it at CN¥59.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

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. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 10% growth on an annualised basis. That is in line with its 11% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 14% annually. So although Topchoice Medical is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

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. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

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 forecasts for Topchoice Medical going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Topchoice Medical that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.