CanSino Biologics Inc. (HKG:6185) Just Reported And Analysts Have Been Lifting Their Price Targets

Investors in CanSino Biologics Inc. (HKG:6185) had a good week, as its shares rose 3.0% to close at HK$51.80 following the release of its second-quarter results. Overall the results were a little better than the analysts were expecting, with revenues beating forecasts by 6.8%to hit CN¥268m. 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. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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Taking into account the latest results, the consensus forecast from CanSino Biologics' three analysts is for revenues of CN¥1.08b in 2025. This reflects a notable 17% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 98% to CN¥0.015. Before this earnings announcement, the analysts had been modelling revenues of CN¥1.10b and losses of CN¥0.025 per share in 2025. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a very promising decrease in losses per share in particular.

See our latest analysis for CanSino Biologics

The average price target rose 12% to HK$48.35, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on CanSino Biologics, with the most bullish analyst valuing it at HK$56.44 and the most bearish at HK$40.51 per share. 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.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that CanSino Biologics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 36% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 13% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 26% per year. Not only are CanSino Biologics' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster 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.

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

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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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.