Earnings Report: Amoy Diagnostics Co., Ltd. Missed Revenue Estimates By 6.1%

Last week saw the newest quarterly earnings release from Amoy Diagnostics Co., Ltd. (SZSE:300685), an important milestone in the company's journey to build a stronger business. Results look mixed - while revenue fell marginally short of analyst estimates at CN¥233m, statutory earnings were in line with expectations, at CN¥0.16 per share. 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.

See our latest analysis for Amoy Diagnostics

Taking into account the latest results, the most recent consensus for Amoy Diagnostics from nine analysts is for revenues of CN¥1.27b in 2024. If met, it would imply a solid 18% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 15% to CN¥0.79. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥1.27b and earnings per share (EPS) of CN¥0.76 in 2024. So the consensus seems to have become somewhat more optimistic on Amoy Diagnostics' earnings potential following these results.

There's been no major changes to the consensus price target of CN¥29.55, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Amoy Diagnostics analyst has a price target of CN¥36.00 per share, while the most pessimistic values it at CN¥26.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Amoy Diagnostics' past performance and to peers in the same industry. The analysts are definitely expecting Amoy Diagnostics' growth to accelerate, with the forecast 24% annualised growth to the end of 2024 ranking favourably alongside historical growth of 14% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 22% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Amoy Diagnostics is expected to grow at about the same rate as 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 Amoy Diagnostics following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Amoy Diagnostics. Long-term earnings power is much more important than next year's profits. We have forecasts for Amoy Diagnostics going out to 2026, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Amoy Diagnostics you should be aware of.

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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.