Zhejiang Jiuzhou Pharmaceutical Co., Ltd Just Missed Revenue By 17%: Here's What Analysts Think Will Happen Next

As you might know, Zhejiang Jiuzhou Pharmaceutical Co., Ltd (SHSE:603456) last week released its latest full-year, and things did not turn out so great for shareholders. Earnings fell badly short of analyst estimates, with CN¥5.5b revenues missing by 17%, and statutory earnings per share (EPS) of CN¥1.16 falling short of forecasts by some -14%. 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. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Zhejiang Jiuzhou Pharmaceutical after the latest results.

View our latest analysis for Zhejiang Jiuzhou Pharmaceutical

Taking into account the latest results, the current consensus from Zhejiang Jiuzhou Pharmaceutical's four analysts is for revenues of CN¥6.68b in 2024. This would reflect a major 21% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 31% to CN¥1.50. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥8.25b and earnings per share (EPS) of CN¥1.71 in 2024. It looks like sentiment has declined substantially in the aftermath of these results, with a substantial drop in revenue estimates and a real cut to earnings per share numbers as well.

The consensus price target fell 25% to CN¥28.31, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Zhejiang Jiuzhou Pharmaceutical at CN¥39.00 per share, while the most bearish prices it at CN¥21.60. 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.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Zhejiang Jiuzhou Pharmaceutical's revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2024 being well below the historical 27% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% annually. Even after the forecast slowdown in growth, it seems obvious that Zhejiang Jiuzhou Pharmaceutical is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Zhejiang Jiuzhou Pharmaceutical. They also downgraded Zhejiang Jiuzhou Pharmaceutical's revenue estimates, but industry data suggests that it is expected to grow faster 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.

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 Zhejiang Jiuzhou Pharmaceutical analysts - going out to 2026, and you can see them free on our platform here.

Plus, you should also learn about the 1 warning sign we've spotted with Zhejiang Jiuzhou Pharmaceutical .

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.