Stock Analysis

Earnings Report: Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. Missed Revenue Estimates By 7.0%

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Investors in Jiangsu Yuyue Medical Equipment & Supply Co., Ltd. (SZSE:002223) had a good week, as its shares rose 3.3% to close at CN¥38.65 following the release of its quarterly results. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥2.2b, statutory earnings were in line with expectations, at CN¥2.41 per share. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Jiangsu Yuyue Medical Equipment & Supply

SZSE:002223 Earnings and Revenue Growth April 30th 2024

After the latest results, the eight analysts covering Jiangsu Yuyue Medical Equipment & Supply are now predicting revenues of CN¥8.72b in 2024. If met, this would reflect a meaningful 16% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to decline 10% to CN¥2.10 in the same period. Before this earnings report, the analysts had been forecasting revenues of CN¥9.38b and earnings per share (EPS) of CN¥2.19 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The average price target climbed 5.3% to CN¥46.79despite the reduced earnings forecasts, suggesting that this earnings impact could be a positive for the stock, once it passes. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Jiangsu Yuyue Medical Equipment & Supply analyst has a price target of CN¥51.30 per share, while the most pessimistic values it at CN¥42.00. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

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 Jiangsu Yuyue Medical Equipment & Supply's growth to accelerate, with the forecast 22% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 20% annually. Jiangsu Yuyue Medical Equipment & Supply is expected to grow at about the same rate as its industry, so it's not clear that we can draw any conclusions from its growth relative to competitors.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Jiangsu Yuyue Medical Equipment & Supply. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Jiangsu Yuyue Medical Equipment & Supply analysts - going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Jiangsu Yuyue Medical Equipment & Supply that you should be aware of.

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Find out whether Jiangsu Yuyue Medical Equipment & Supply is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.