Byhealth Co., Ltd (SZSE:300146) Just Reported Earnings, And Analysts Cut Their Target Price

Shareholders might have noticed that Byhealth Co., Ltd (SZSE:300146) filed its annual result this time last week. The early response was not positive, with shares down 2.2% to CN¥16.71 in the past week. It was a credible result overall, with revenues of CN¥9.4b and statutory earnings per share of CN¥1.03 both in line with analyst estimates, showing that Byhealth is executing in line with expectations. 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Byhealth

Taking into account the latest results, the current consensus from Byhealth's eight analysts is for revenues of CN¥10.3b in 2024. This would reflect a solid 10.0% increase on its revenue over the past 12 months. Per-share earnings are expected to step up 10% to CN¥1.13. In the lead-up to this report, the analysts had been modelling revenues of CN¥10.5b and earnings per share (EPS) of CN¥1.21 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

The average price target fell 7.1% to CN¥22.99, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. Currently, the most bullish analyst values Byhealth at CN¥31.00 per share, while the most bearish prices it at CN¥18.20. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Byhealth's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 10.0% growth on an annualised basis. This is compared to a historical growth rate of 15% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 15% annually. Factoring in the forecast slowdown in growth, it seems obvious that Byhealth is also expected to grow slower than other industry participants.

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. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Byhealth's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Byhealth's future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Byhealth analysts - going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Byhealth that you need to take into consideration.

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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.