Earnings Update: Here's Why Analysts Just Lifted Their Ocumension Therapeutics (HKG:1477) Price Target To HK$9.27

As you might know, Ocumension Therapeutics (HKG:1477) last week released its latest interim, and things did not turn out so great for shareholders. Revenues missed expectations somewhat, coming in at CN¥294m, but statutory earnings fell catastrophically short, with a loss of CN¥0.17 some 42% larger than what the analysts had predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ocumension Therapeutics after the latest results.

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Taking into account the latest results, the most recent consensus for Ocumension Therapeutics from dual analysts is for revenues of CN¥804.7m in 2025. If met, it would imply a sizeable 48% increase on its revenue over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 38% to CN¥0.19. Before this latest report, the consensus had been expecting revenues of CN¥835.8m and CN¥0.12 per share in losses. While this year's revenue estimates dropped there was also a massive increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

Check out our latest analysis for Ocumension Therapeutics

The average price target lifted 6.5% to HK$9.27, clearly signalling that the weaker revenue and EPS outlook are not expected to weigh on the stock over the longer term.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Ocumension Therapeutics' past performance and to peers in the same industry. The analysts are definitely expecting Ocumension Therapeutics' growth to accelerate, with the forecast 119% annualised growth to the end of 2025 ranking favourably alongside historical growth of 55% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Ocumension Therapeutics is expected to grow much faster than its industry.

The Bottom Line

The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Ocumension Therapeutics. They also downgraded Ocumension Therapeutics' revenue estimates, but industry data suggests that it is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Ocumension Therapeutics. Long-term earnings power is much more important than next year's profits. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

It is also worth noting that we have found 3 warning signs for Ocumension Therapeutics that you need to take into consideration.

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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.