One SWS Hemodialysis Care Co., Ltd. (SHSE:688410) Analyst Is Reducing Their Forecasts For This Year

The analyst covering SWS Hemodialysis Care Co., Ltd. (SHSE:688410) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) estimates were cut sharply as the analyst factored in the latest outlook for the business, concluding that they were too optimistic previously.

Following the downgrade, the latest consensus from SWS Hemodialysis Care's one analyst is for revenues of CN¥719m in 2024, which would reflect a huge 25% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to surge 78% to CN¥0.59. Prior to this update, the analyst had been forecasting revenues of CN¥1.0b and earnings per share (EPS) of CN¥0.76 in 2024. Indeed, we can see that the analyst is a lot more bearish about SWS Hemodialysis Care's prospects, administering a pretty serious reduction to revenue estimates and slashing their EPS estimates to boot.

Check out our latest analysis for SWS Hemodialysis Care

The consensus price target fell 36% to CN¥15.00, with the weaker earnings outlook clearly leading analyst valuation estimates.

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. One thing stands out from these estimates, which is that SWS Hemodialysis Care is forecast to grow faster in the future than it has in the past, with revenues expected to display 25% annualised growth until the end of 2024. If achieved, this would be a much better result than the 8.1% annual decline over the past year. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 19% per year. Not only are SWS Hemodialysis Care's revenues expected to improve, it seems that the analyst is also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for SWS Hemodialysis Care. While the analyst did downgrade their revenue estimates, these forecasts still imply revenues will perform better than the wider market. After such a stark change in sentiment from the analyst, we'd understand if readers now felt a bit wary of SWS Hemodialysis Care.

There might be good reason for analyst bearishness towards SWS Hemodialysis Care, like concerns around earnings quality. For more information, you can click here to discover this and the 2 other risks we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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