EC Healthcare Just Missed EPS By 18%: Here's What Analysts Think Will Happen Next

EC Healthcare (HKG:2138) shareholders are probably feeling a little disappointed, since its shares fell 6.8% to HK$12.00 in the week after its latest half-year results. It was not a great result overall. While revenues of HK$1.4b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 18% to hit HK$14.00 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for EC Healthcare

Taking into account the latest results, the consensus forecast from EC Healthcare's five analysts is for revenues of HK$2.95b in 2022, which would reflect a notable 8.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to soar 30% to HK$0.34. In the lead-up to this report, the analysts had been modelling revenues of HK$2.88b and earnings per share (EPS) of HK$0.33 in 2022. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of HK$18.38, suggesting that the forecast performance does not have a long term impact on the company's valuation. 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. There are some variant perceptions on EC Healthcare, with the most bullish analyst valuing it at HK$23.00 and the most bearish at HK$14.33 per share. 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 EC Healthcare's past performance and to peers in the same industry. We can infer from the latest estimates that forecasts expect a continuation of EC Healthcare'shistorical trends, as the 17% annualised revenue growth to the end of 2022 is roughly in line with the 18% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 16% per year. So although EC Healthcare is expected to maintain its revenue growth rate, it's only growing at about the rate of the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around EC Healthcare's earnings potential next year. They also upgraded their revenue forecasts, although the latest estimates suggest that EC Healthcare will 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 EC Healthcare. Long-term earnings power is much more important than next year's profits. We have forecasts for EC Healthcare going out to 2024, and you can see them free on our platform here.

You still need to take note of risks, for example - EC Healthcare has 2 warning signs we think 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.