Keymed Biosciences Inc. (HKG:2162) Just Reported And Analysts Have Been Cutting Their Estimates

The annual results for Keymed Biosciences Inc. (HKG:2162) were released last week, making it a good time to revisit its performance. It was a pretty bad result overall; while revenues were in line with expectations at CN¥354m, statutory losses exploded to CN¥1.37 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

View our latest analysis for Keymed Biosciences

Taking into account the latest results, the current consensus, from the nine analysts covering Keymed Biosciences, is for revenues of CN¥121.1m in 2024. This implies a substantial 66% reduction in Keymed Biosciences' revenue over the past 12 months. Per-share losses are expected to explode, reaching CN¥3.14 per share. Before this earnings announcement, the analysts had been modelling revenues of CN¥275.7m and losses of CN¥1.90 per share in 2024. There's been a definite change in sentiment in this update, with the analysts administering a notable cut to next year's revenue estimates, while at the same time increasing their loss per share forecasts.

The average price target fell 15% to HK$62.76, implicitly signalling that lower earnings per share are a leading indicator for Keymed Biosciences' valuation. 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. The most optimistic Keymed Biosciences analyst has a price target of HK$78.45 per share, while the most pessimistic values it at HK$52.83. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 66% by the end of 2024. This indicates a significant reduction from annual growth of 79% over the last three years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 25% annually for the foreseeable future. It's pretty clear that Keymed Biosciences' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. 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.

With that in mind, we wouldn't be too quick to come to a conclusion on Keymed Biosciences. Long-term earnings power is much more important than next year's profits. We have forecasts for Keymed Biosciences going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 3 warning signs for Keymed Biosciences (1 can't be ignored!) that we have uncovered.

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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.