Results: JD Health International Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

JD Health International Inc. (HKG:6618) last week reported its latest half-year results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. Revenues of CN¥28b fell slightly short of expectations, but earnings were a definite bright spot, with statutory per-share profits of CN¥0.65 an impressive 91% ahead of estimates. 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. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for JD Health International

After the latest results, the 19 analysts covering JD Health International are now predicting revenues of CN¥57.9b in 2024. If met, this would reflect an okay 5.7% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to jump 22% to CN¥1.00. In the lead-up to this report, the analysts had been modelling revenues of CN¥61.9b and earnings per share (EPS) of CN¥0.76 in 2024. Although the analysts have lowered their revenue forecasts, they've also made a massive increase in their earnings per share estimates, which implies there's been something of an uptick in sentiment following the latest results.

The consensus price target fell 12% to HK$36.77, with the analysts signalling that the weaker revenue outlook was a more powerful indicator than the upgraded EPS forecasts. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on JD Health International, with the most bullish analyst valuing it at HK$80.22 and the most bearish at HK$17.91 per share. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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. It's pretty clear that there is an expectation that JD Health International's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 12% growth on an annualised basis. This is compared to a historical growth rate of 26% over the past three years. Compare this to the 35 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 11% per year. So it's pretty clear that, while JD Health International's revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around JD Health International's earnings potential next year. They also downgraded their revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. Yet - earnings are more important to the intrinsic value of the business. 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 JD Health International analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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.