Analysts Just Made A Major Revision To Their EuroEyes International Eye Clinic Limited (HKG:1846) Revenue Forecasts

Market forces rained on the parade of EuroEyes International Eye Clinic Limited (HKG:1846) shareholders today, when the analysts downgraded their forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic.

After this downgrade, EuroEyes International Eye Clinic's two analysts are now forecasting revenues of HK$988m in 2023. This would be a major 62% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing HK$1.2b of revenue in 2023. The consensus view seems to have become more pessimistic on EuroEyes International Eye Clinic, noting the measurable cut to revenue estimates in this update.

View our latest analysis for EuroEyes International Eye Clinic

Additionally, the consensus price target for EuroEyes International Eye Clinic increased 13% to HK$7.16, showing a clear increase in optimism from the analysts involved. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic EuroEyes International Eye Clinic analyst has a price target of HK$7.60 per share, while the most pessimistic values it at HK$6.71. Still, with such a tight range of estimates, it suggests the analysts have a pretty good idea of what they think the company is worth.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's clear from the latest estimates that EuroEyes International Eye Clinic's rate of growth is expected to accelerate meaningfully, with the forecast 62% annualised revenue growth to the end of 2023 noticeably faster than its historical growth of 14% p.a. 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 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that EuroEyes International Eye Clinic is expected to grow much faster than its industry.

The Bottom Line

The clear low-light was that analysts slashing their revenue forecasts for EuroEyes International Eye Clinic this year. They're also forecasting more rapid revenue growth than the wider market. There was also a nice increase in the price target, with analysts apparently feeling that the intrinsic value of the business is improving. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of EuroEyes International Eye Clinic going forwards.

Looking to learn more? At least one of EuroEyes International Eye Clinic's two analysts has provided estimates out to 2025, which can be seen for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.