Guangzhou Kingmed Diagnostics Group Co., Ltd. Just Missed Revenue By 9.5%: Here's What Analysts Think Will Happen Next

The analysts might have been a bit too bullish on Guangzhou Kingmed Diagnostics Group Co., Ltd. (SHSE:603882), given that the company fell short of expectations when it released its second-quarter results last week. Guangzhou Kingmed Diagnostics Group missed analyst forecasts, with revenues of CN¥2.0b and statutory earnings per share (EPS) of CN¥0.23, falling short by 9.5% and 4.2% respectively. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Guangzhou Kingmed Diagnostics Group

Following last week's earnings report, Guangzhou Kingmed Diagnostics Group's eleven analysts are forecasting 2024 revenues to be CN¥8.23b, approximately in line with the last 12 months. Statutory earnings per share are predicted to grow 18% to CN¥1.14. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥9.08b and earnings per share (EPS) of CN¥1.65 in 2024. From this we can that sentiment has definitely become more bearish after the latest results, leading to lower revenue forecasts and a pretty serious reduction to earnings per share estimates.

The analysts made no major changes to their price target of CN¥32.76, suggesting the downgrades are not expected to have a long-term impact on Guangzhou Kingmed Diagnostics Group's valuation. 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 Guangzhou Kingmed Diagnostics Group, with the most bullish analyst valuing it at CN¥41.00 and the most bearish at CN¥23.50 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.5% by the end of 2024. This indicates a significant reduction from annual growth of 12% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 13% per year. It's pretty clear that Guangzhou Kingmed Diagnostics Group's revenues are expected to perform substantially worse 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. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at CN¥32.76, 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 Guangzhou Kingmed Diagnostics Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Guangzhou Kingmed Diagnostics Group analysts - going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 4 warning signs for Guangzhou Kingmed Diagnostics Group (1 can't be ignored!) that we have uncovered.

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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.