Joinn Laboratories(China)Co.,Ltd. Just Missed Earnings - But Analysts Have Updated Their Models

The analysts might have been a bit too bullish on Joinn Laboratories(China)Co.,Ltd. (SHSE:603127), given that the company fell short of expectations when it released its second-quarter results last week. It looks like quite a negative result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of CN¥525m missed by 14%, and statutory earnings per share of CN¥0.13 fell short of forecasts by 33%. 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. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Joinn Laboratories(China)Co.Ltd

Taking into account the latest results, Joinn Laboratories(China)Co.Ltd's ten analysts currently expect revenues in 2024 to be CN¥2.23b, approximately in line with the last 12 months. Statutory earnings per share are predicted to increase 3.5% to CN¥0.19. In the lead-up to this report, the analysts had been modelling revenues of CN¥2.19b and earnings per share (EPS) of CN¥0.43 in 2024. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

The average price target fell 5.8% to CN¥15.13, with reduced earnings forecasts clearly tied to a lower valuation estimate. 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. There are some variant perceptions on Joinn Laboratories(China)Co.Ltd, with the most bullish analyst valuing it at CN¥21.00 and the most bearish at CN¥6.90 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Joinn Laboratories(China)Co.Ltd's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 1.6% growth on an annualised basis. This is compared to a historical growth rate of 29% 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 14% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Joinn Laboratories(China)Co.Ltd.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. 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.

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 Joinn Laboratories(China)Co.Ltd analysts - going out to 2026, and you can see them free on our platform here.

Even so, be aware that Joinn Laboratories(China)Co.Ltd is showing 3 warning signs in our investment analysis , you should know about...

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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.