These Analysts Just Made A Massive Downgrade To Their Medlive Technology Co., Ltd. (HKG:2192) EPS Forecasts

The analysts covering Medlive Technology Co., Ltd. (HKG:2192) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

After this downgrade, Medlive Technology's dual analysts are now forecasting revenues of CN¥368m in 2022. This would be a substantial 30% improvement in sales compared to the last 12 months. Per-share earnings are expected to leap 269% to CN¥0.21. Previously, the analysts had been modelling revenues of CN¥575m and earnings per share (EPS) of CN¥2.15 in 2022. It looks like analyst sentiment has declined substantially, with a pretty serious reduction to revenue estimates and a large cut to earnings per share numbers as well.

View our latest analysis for Medlive Technology

Despite the cuts to forecast earnings, there was no real change to the CN¥25.02 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. 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. There are some variant perceptions on Medlive Technology, with the most bullish analyst valuing it at CN¥40.53 and the most bearish at CN¥21.00 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying 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. We can infer from the latest estimates that forecasts expect a continuation of Medlive Technology'shistorical trends, as the 30% annualised revenue growth to the end of 2022 is roughly in line with the 36% annual revenue growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 17% annually. So it's pretty clear that Medlive Technology is forecast to grow substantially faster than its industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately, analysts also downgraded their revenue estimates, although our data indicates revenues are expected to perform better than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Medlive Technology.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have analyst estimates for Medlive Technology going out as far as 2024, and you can see them 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.