CStone Pharmaceuticals (HKG:2616) Just Reported And Analysts Have Been Cutting Their Estimates

The investors in CStone Pharmaceuticals's (HKG:2616) will be rubbing their hands together with glee today, after the share price leapt 22% to HK$8.33 in the week following its yearly results. Revenues came in 31% better than analyst models expected, at CN¥270m, although statutory losses ballooned 48% to CN¥0.31, which is much worse than what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from CStone Pharmaceuticals' four analysts is for revenues of CN¥412.1m in 2026. This would reflect a major 53% increase on its revenue over the past 12 months. Per-share losses are predicted to creep up to CN¥0.31. Before this latest report, the consensus had been expecting revenues of CN¥487.1m and CN¥0.12 per share in losses. 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.

See our latest analysis for CStone Pharmaceuticals

The average price target was broadly unchanged at HK$13.50, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation. 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. Currently, the most bullish analyst values CStone Pharmaceuticals at HK$20.78 per share, while the most bearish prices it at HK$9.45. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the CStone Pharmaceuticals' past performance and to peers in the same industry. One thing stands out from these estimates, which is that CStone Pharmaceuticals is forecast to grow faster in the future than it has in the past, with revenues expected to display 53% annualised growth until the end of 2026. If achieved, this would be a much better result than the 25% annual decline 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 25% per year. Not only are CStone Pharmaceuticals' 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 increased their loss per share estimates for next year. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

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. At Simply Wall St, we have a full range of analyst estimates for CStone Pharmaceuticals going out to 2028, and you can see them free on our platform here..

You should always think about risks though. Case in point, we've spotted 2 warning signs for CStone Pharmaceuticals 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.