Downgrade: Here's How This Analyst Sees Vincent Medical Holdings Limited (HKG:1612) Performing In The Near Term

Today is shaping up negative for Vincent Medical Holdings Limited (HKG:1612) shareholders, with the covering analyst delivering a substantial negative revision to this year's forecasts. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analyst has soured majorly on the business.

Following the latest downgrade, the current consensus, from the solo analyst covering Vincent Medical Holdings, is for revenues of HK$795m in 2021, which would reflect a sizeable 31% reduction in Vincent Medical Holdings' sales over the past 12 months. Statutory earnings per share are anticipated to plunge 59% to HK$0.14 in the same period. Before this latest update, the analyst had been forecasting revenues of HK$975m and earnings per share (EPS) of HK$0.20 in 2021. It looks like analyst sentiment has declined substantially, with a substantial drop in revenue estimates and a large cut to earnings per share numbers as well.

See our latest analysis for Vincent Medical Holdings

The consensus price target fell 33% to HK$3.20, with the weaker earnings outlook clearly leading analyst valuation estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 31% by the end of 2021. This indicates a significant reduction from annual growth of 15% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 24% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Vincent Medical Holdings is expected to lag the wider industry.

The Bottom Line

The biggest issue in the new estimates is that the analyst has reduced their earnings per share estimates, suggesting business headwinds lay ahead for Vincent Medical Holdings. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of Vincent Medical Holdings.

There might be good reason for analyst bearishness towards Vincent Medical Holdings, like dilutive stock issuance over the past year. For more information, you can click here to discover this and the 3 other concerns we've identified.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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