The Akeso, Inc. (HKG:9926) Half-Yearly Results Are Out And Analysts Have Published New Forecasts

Investors in Akeso, Inc. (HKG:9926) had a good week, as its shares rose 6.2% to close at HK$34.45 following the release of its half-year results. It was a pretty good result, with revenues of CN¥3.7b, and Akeso came in a solid 19% ahead of expectations. 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 thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Akeso

Taking into account the latest results, the most recent consensus for Akeso from 19 analysts is for revenues of CN¥5.21b in 2023. If met, it would imply a decent 20% increase on its revenue over the past 12 months. Statutory earnings per share are expected to shrink 7.9% to CN¥2.18 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥5.16b and earnings per share (EPS) of CN¥2.31 in 2023. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at HK$54.57, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Akeso analyst has a price target of HK$61.41 per share, while the most pessimistic values it at HK$36.14. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

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. We would highlight that Akeso's revenue growth is expected to slow, with the forecast 44% annualised growth rate until the end of 2023 being well below the historical 131% p.a. growth over the last three years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 35% per year. Even after the forecast slowdown in growth, it seems obvious that Akeso is also expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at HK$54.57, with the latest estimates not enough to have an impact on their price targets.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Akeso going out to 2025, and you can see them free on our platform here.

You still need to take note of risks, for example - Akeso has 2 warning signs we think you should be aware of.

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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.