Hygeia Healthcare Holdings Co., Limited (HKG:6078) Analysts Are Cutting Their Estimates: Here's What You Need To Know

There's been a notable change in appetite for Hygeia Healthcare Holdings Co., Limited (HKG:6078) shares in the week since its half-yearly report, with the stock down 11% to HK$16.98. It was a credible result overall, with revenues of CN¥2.4b and statutory earnings per share of CN¥0.61 both in line with analyst estimates, showing that Hygeia Healthcare Holdings is executing in line with expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

Check out our latest analysis for Hygeia Healthcare Holdings

Taking into account the latest results, the most recent consensus for Hygeia Healthcare Holdings from twelve analysts is for revenues of CN¥5.20b in 2024. If met, it would imply a meaningful 11% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 9.3% to CN¥1.27. In the lead-up to this report, the analysts had been modelling revenues of CN¥5.62b and earnings per share (EPS) of CN¥1.41 in 2024. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

The consensus price target fell 9.3% to HK$44.19, with the weaker earnings outlook clearly leading valuation estimates. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Hygeia Healthcare Holdings analyst has a price target of HK$69.75 per share, while the most pessimistic values it at HK$27.64. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Hygeia Healthcare Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 22% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% annually. Even after the forecast slowdown in growth, it seems obvious that Hygeia Healthcare Holdings is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. They also downgraded Hygeia Healthcare Holdings' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Hygeia Healthcare Holdings going out to 2026, and you can see them free on our platform here.

You can also see whether Hygeia Healthcare Holdings is carrying too much debt, and whether its balance sheet is healthy, for free on our platform here.

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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.