Earnings Miss: Betta Pharmaceuticals Co., Ltd. Missed EPS By 6.1% And Analysts Are Revising Their Forecasts

It's been a good week for Betta Pharmaceuticals Co., Ltd. (SZSE:300558) shareholders, because the company has just released its latest first-quarter results, and the shares gained 6.8% to CN¥38.65. Betta Pharmaceuticals beat revenue expectations by 5.1%, at CN¥736m. Statutory earnings per share (EPS) came in at CN¥0.23, some 6.1% short of analyst estimates. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Betta Pharmaceuticals

Taking into account the latest results, the most recent consensus for Betta Pharmaceuticals from four analysts is for revenues of CN¥3.40b in 2024. If met, it would imply a major 28% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to shoot up 52% to CN¥1.43. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥3.47b and earnings per share (EPS) of CN¥1.19 in 2024. Although the revenue estimates have not really changed, we can see there's been a substantial gain in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The average the analysts price target fell 5.1% to CN¥54.14, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them. 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. Currently, the most bullish analyst values Betta Pharmaceuticals at CN¥65.00 per share, while the most bearish prices it at CN¥43.27. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Betta Pharmaceuticals' growth to accelerate, with the forecast 39% annualised growth to the end of 2024 ranking favourably alongside historical growth of 12% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 14% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Betta Pharmaceuticals to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Betta Pharmaceuticals following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster 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 Betta Pharmaceuticals' 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. At Simply Wall St, we have a full range of analyst estimates for Betta Pharmaceuticals going out to 2026, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Betta Pharmaceuticals , and understanding it should be part of your investment process.

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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.