Hygeia Healthcare Holdings Co., Limited (HKG:6078) Analysts Just Cut Their EPS Forecasts Substantially

The latest analyst coverage could presage a bad day for Hygeia Healthcare Holdings Co., Limited (HKG:6078), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon. At HK$14.78, shares are up 5.3% in the past 7 days. It will be interesting to see if this downgrade motivates investors to start selling their holdings.

Following the downgrade, the latest consensus from Hygeia Healthcare Holdings' 14 analysts is for revenues of CN¥4.9b in 2025, which would reflect a decent 9.3% improvement in sales compared to the last 12 months. Statutory earnings per share are presumed to expand 16% to CN¥1.12. Before this latest update, the analysts had been forecasting revenues of CN¥6.0b and earnings per share (EPS) of CN¥1.47 in 2025. It looks like analyst sentiment has declined substantially, with a measurable cut to revenue estimates and a pretty serious decline to earnings per share numbers as well.

Check out our latest analysis for Hygeia Healthcare Holdings

It'll come as no surprise then, to learn that the analysts have cut their price target 6.0% to CN¥24.91. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Hygeia Healthcare Holdings analyst has a price target of CN¥41.06 per share, while the most pessimistic values it at CN¥15.42. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily on the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

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 Hygeia Healthcare Holdings' revenue growth is expected to slow, with the forecast 9.3% annualised growth rate until the end of 2025 being well below the historical 29% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 7.3% 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 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. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Hygeia Healthcare Holdings.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Hygeia Healthcare Holdings going out to 2027, 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 with high insider ownership.

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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.