Analysts Just Shaved Their Huaxia Eye Hospital Group Co.,Ltd. (SZSE:301267) Forecasts Dramatically

The analysts covering Huaxia Eye Hospital Group Co.,Ltd. (SZSE:301267) 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 analysts factored in the latest outlook for the business, concluding that they were too optimistic previously. At CN¥26.12, shares are up 4.9% in the past 7 days. Investors could be forgiven for changing their mind on the business following the downgrade; but it's not clear if the revised forecasts will lead to selling activity.

Following the downgrade, the current consensus from Huaxia Eye Hospital GroupLtd's five analysts is for revenues of CN¥4.6b in 2024 which - if met - would reflect a meaningful 14% increase on its sales over the past 12 months. Statutory earnings per share are presumed to step up 17% to CN¥0.94. Previously, the analysts had been modelling revenues of CN¥5.2b and earnings per share (EPS) of CN¥1.06 in 2024. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

Check out our latest analysis for Huaxia Eye Hospital GroupLtd

It'll come as no surprise then, to learn that the analysts have cut their price target 11% to CN¥50.02.

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. We would highlight that Huaxia Eye Hospital GroupLtd's revenue growth is expected to slow, with the forecast 14% annualised growth rate until the end of 2024 being well below the historical 21% growth over the last year. Compare this to the 40 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it looks like Huaxia Eye Hospital GroupLtd is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for Huaxia Eye Hospital GroupLtd. Lamentably, they also downgraded their sales forecasts, but the business is still expected to grow at roughly the same rate as the market itself. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Huaxia Eye Hospital GroupLtd analysts - going out to 2026, and you can see them free on our platform here.

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 that insiders are buying.

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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.