HK$97.44 - That's What Analysts Think Innovent Biologics, Inc. (HKG:1801) Is Worth After These Results

Innovent Biologics, Inc. (HKG:1801) shareholders are probably feeling a little disappointed, since its shares fell 2.6% to HK$96.85 in the week after its latest interim results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 5.3%to hit CN¥6.0b. 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. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Taking into account the latest results, the consensus forecast from Innovent Biologics' 28 analysts is for revenues of CN¥12.2b in 2025. This reflects a satisfactory 6.9% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 31% to CN¥0.46 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥11.8b and earnings per share (EPS) of CN¥0.24 in 2025. There's been a pretty noticeable increase in sentiment, with the analysts upgrading revenues and making a massive increase in earnings per share in particular.

View our latest analysis for Innovent Biologics

It will come as no surprise to learn that the analysts have increased their price target for Innovent Biologics 12% to HK$97.44on the back of these upgrades. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Innovent Biologics at HK$125 per share, while the most bearish prices it at HK$57.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Innovent Biologics' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Innovent Biologics' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 14% growth on an annualised basis. This is compared to a historical growth rate of 25% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 27% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Innovent Biologics.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Innovent Biologics' earnings potential next year. Fortunately, they also upgraded their revenue estimates, although our data indicates it is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

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 Innovent Biologics going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 1 warning sign for Innovent Biologics that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.