News Flash: One MicroTech Medical (Hangzhou) Co., Ltd. (HKG:2235) Analyst Has Been Trimming Their Revenue Forecasts

Market forces rained on the parade of MicroTech Medical (Hangzhou) Co., Ltd. (HKG:2235) shareholders today, when the covering analyst downgraded their forecasts for this year. Revenue estimates were cut sharply as the analyst signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well.

Following the downgrade, the most recent consensus for MicroTech Medical (Hangzhou) from its solitary analyst is for revenues of CN¥178m in 2022 which, if met, would be a decent 8.9% increase on its sales over the past 12 months. Before the latest update, the analyst was foreseeing CN¥232m of revenue in 2022. It looks like forecasts have become a fair bit less optimistic on MicroTech Medical (Hangzhou), given the pretty serious reduction to revenue estimates.

View our latest analysis for MicroTech Medical (Hangzhou)

Notably, the analyst has cut their price target 13% to CN¥12.59, suggesting concerns around MicroTech Medical (Hangzhou)'s valuation.

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. We would highlight that MicroTech Medical (Hangzhou)'s revenue growth is expected to slow, with the forecast 19% annualised growth rate until the end of 2022 being well below the historical 45% growth over the last year. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 25% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than MicroTech Medical (Hangzhou).

The Bottom Line

The most important thing to take away is that the analyst cut their revenue estimates for this year. They're also anticipating slower revenue growth than the wider market. Furthermore, there was a cut to the price target, suggesting that the latest news has led to more pessimism about the intrinsic value of the business. Given the stark change in sentiment, we'd understand if investors became more cautious on MicroTech Medical (Hangzhou) after today.

Need some more information? One MicroTech Medical (Hangzhou) broker/analyst has provided estimates out to 2024, which can be seen for free on our platform here.

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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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.