CN¥50.78: That's What Analysts Think Xiangyu Medical Co.,Ltd (SHSE:688626) Is Worth After Its Latest Results

It's been a sad week for Xiangyu Medical Co.,Ltd (SHSE:688626), who've watched their investment drop 15% to CN¥35.71 in the week since the company reported its quarterly result. It was a workmanlike result, with revenues of CN¥169m coming in 3.1% ahead of expectations, and statutory earnings per share of CN¥1.46, in line with analyst appraisals. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Xiangyu MedicalLtd

After the latest results, the three analysts covering Xiangyu MedicalLtd are now predicting revenues of CN¥883.0m in 2024. If met, this would reflect a meaningful 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 22% to CN¥1.78. Before this earnings report, the analysts had been forecasting revenues of CN¥925.0m and earnings per share (EPS) of CN¥1.78 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.

The average price target was reduced 19% to CN¥50.78, with the lower revenue forecasts indicating negative sentiment towards Xiangyu MedicalLtd, even though earnings forecasts were unchanged. 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. There are some variant perceptions on Xiangyu MedicalLtd, with the most bullish analyst valuing it at CN¥51.00 and the most bearish at CN¥50.56 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

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. The analysts are definitely expecting Xiangyu MedicalLtd's growth to accelerate, with the forecast 20% annualised growth to the end of 2024 ranking favourably alongside historical growth of 13% per annum over the past three years. Compare this with other companies in the same industry, which are forecast to grow their revenue 19% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Xiangyu MedicalLtd is expected to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Xiangyu MedicalLtd. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Xiangyu MedicalLtd 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 2 warning signs for Xiangyu MedicalLtd (1 doesn't sit too well with us!) that we have uncovered.

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.