Analysts Just Shaved Their Porton Pharma Solutions Ltd. (SZSE:300363) Forecasts Dramatically

Market forces rained on the parade of Porton Pharma Solutions Ltd. (SZSE:300363) shareholders today, when the analysts downgraded their 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.

Following the downgrade, the current consensus from Porton Pharma Solutions' eight analysts is for revenues of CN¥3.1b in 2024 which - if met - would reflect a modest 2.8% increase on its sales over the past 12 months. The loss per share is anticipated to greatly reduce in the near future, narrowing 98% to CN¥0.005. Before this latest update, the analysts had been forecasting revenues of CN¥3.9b and earnings per share (EPS) of CN¥0.82 in 2024. There looks to have been a major change in sentiment regarding Porton Pharma Solutions' prospects, with a pretty serious reduction to revenues and the analysts now forecasting a loss instead of a profit.

See our latest analysis for Porton Pharma Solutions

The consensus price target fell 6.5% to CN¥26.65, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Porton Pharma Solutions' past performance and to peers in the same industry. We would highlight that Porton Pharma Solutions' revenue growth is expected to slow, with the forecast 3.8% annualised growth rate until the end of 2024 being well below the historical 28% 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% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Porton Pharma Solutions.

The Bottom Line

The most important thing to take away is that analysts are expecting Porton Pharma Solutions to become unprofitable this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Porton Pharma Solutions' revenues are expected to grow slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Porton Pharma Solutions.

Worse yet, our risk analysis suggests that Porton Pharma Solutions may find it hard to maintain its dividend following these downgrades. For more information, you can click here to learn more about our dividend analysis and the 1 potential concern we've identified.

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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.