Lotus Pharmaceutical Co., Ltd. Just Missed EPS By 6.5%: Here's What Analysts Think Will Happen Next

Lotus Pharmaceutical Co., Ltd. (TPE:1795) missed earnings with its latest quarterly results, disappointing overly-optimistic forecasters. Results look to have been somewhat negative - revenue fell 2.7% short of analyst estimates at NT$2.9b, and statutory earnings of NT$1.15 per share missed forecasts by 6.5%. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Lotus Pharmaceutical after the latest results.

Check out our latest analysis for Lotus Pharmaceutical

Taking into account the latest results, the most recent consensus for Lotus Pharmaceutical from four analysts is for revenues of NT$11.7b in 2021 which, if met, would be a meaningful 13% increase on its sales over the past 12 months. Per-share earnings are expected to leap 57% to NT$5.47. Before this earnings report, the analysts had been forecasting revenues of NT$11.8b and earnings per share (EPS) of NT$5.57 in 2021. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

The analysts reconfirmed their price target of NT$108, showing that the business is executing well and in line with expectations. 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 Lotus Pharmaceutical analyst has a price target of NT$120 per share, while the most pessimistic values it at NT$100.00. This is a very narrow spread of estimates, implying either that Lotus Pharmaceutical is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. Next year brings more of the same, according to the analysts, with revenue forecast to grow 13%, in line with its 13% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 30% per year. So it's pretty clear that Lotus Pharmaceutical is expected to grow slower than similar companies in the same industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that Lotus Pharmaceutical's revenues are expected to perform worse than the wider industry. The consensus price target held steady at NT$108, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Lotus Pharmaceutical analysts - going out to 2022, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Lotus Pharmaceutical that you should be aware of.

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This article by Simply Wall St is general in nature. 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.
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