Hygeia Healthcare Holdings Co., Limited Earnings Missed Analyst Estimates: Here's What Analysts Are Forecasting Now

Shareholders will be ecstatic, with their stake up 23% over the past week following Hygeia Healthcare Holdings Co., Limited's (HKG:6078) latest yearly results. It looks like the results were a bit of a negative overall. While revenues of CN¥1.4b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 9.3% to hit CN¥0.38 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Hygeia Healthcare Holdings

Following the latest results, Hygeia Healthcare Holdings' seven analysts are now forecasting revenues of CN¥1.93b in 2021. This would be a sizeable 37% improvement in sales compared to the last 12 months. Per-share earnings are expected to surge 69% to CN¥0.64. In the lead-up to this report, the analysts had been modelling revenues of CN¥1.88b and earnings per share (EPS) of CN¥10.33 in 2021. So it's pretty clear the analysts have mixed opinions on Hygeia Healthcare Holdings after the latest results; even though they upped their revenue numbers, it came at the cost of a large cut to per-share earnings expectations.

The consensus price target was unchanged at CN¥57.05, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Hygeia Healthcare Holdings analyst has a price target of CN¥102 per share, while the most pessimistic values it at CN¥50.61. 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.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Hygeia Healthcare Holdings' past performance and to peers in the same industry. The analysts are definitely expecting Hygeia Healthcare Holdings' growth to accelerate, with the forecast 37% annualised growth to the end of 2021 ranking favourably alongside historical growth of 26% per annum over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 15% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Hygeia Healthcare Holdings is expected to grow much faster than its industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hygeia Healthcare Holdings. Happily, they also upgraded their revenue estimates, and are forecasting revenues to grow faster than the wider 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.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Hygeia Healthcare Holdings going out to 2025, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 1 warning sign for Hygeia Healthcare Holdings that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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