Analysts Just Made A Noticeable Upgrade To Their Keymed Biosciences Inc. (HKG:2162) Forecasts

Keymed Biosciences Inc. (HKG:2162) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with analysts modelling a real improvement in business performance. The market seems to be pricing in some improvement in the business too, with the stock up 6.7% over the past week, closing at HK$53.35. Could this big upgrade push the stock even higher?

After the upgrade, the ten analysts covering Keymed Biosciences are now predicting revenues of CN¥396m in 2023. If met, this would reflect a huge 21% improvement in sales compared to the last 12 months. Per-share losses are expected to explode, reaching CN¥1.28 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of CN¥354m and losses of CN¥1.52 per share in 2023. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a sizeable increase to their revenue forecasts while also reducing the estimated loss as the business grows towards breakeven.

Check out our latest analysis for Keymed Biosciences

Despite these upgrades, the analysts have not made any major changes to their price target of CN¥69.38, implying that their latest estimates don't have a long term impact on what they think the stock is worth. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Keymed Biosciences analyst has a price target of CN¥72.92 per share, while the most pessimistic values it at CN¥60.61. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or that the analysts have a clear view on its prospects.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Keymed Biosciences' past performance and to peers in the same industry. We would highlight that Keymed Biosciences' revenue growth is expected to slow, with the forecast 21% annualised growth rate until the end of 2023 being well below the historical 56% growth over the last year. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 34% 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 Keymed Biosciences.

The Bottom Line

The highlight for us was that the consensus reduced its estimated losses this year, perhaps suggesting Keymed Biosciences is moving incrementally towards profitability. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow slower than the wider market. Some investors might be disappointed to see that the price target is unchanged, but we feel that improving fundamentals are usually a positive - assuming these forecasts are met! So Keymed Biosciences could be a good candidate for more research.

Still, 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 Keymed Biosciences going out to 2025, 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 upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.