HLS Therapeutics Inc. (TSE:HLS) Just Reported Second-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?
HLS Therapeutics Inc. (TSE:HLS) defied analyst predictions to release its quarterly results, which were ahead of market expectations. Results overall were solid, with revenues arriving 3.5% better than analyst forecasts at US$15m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.03 per share, were 3.5% smaller than the analysts expected. 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.
Taking into account the latest results, the most recent consensus for HLS Therapeutics from four analysts is for revenues of US$58.4m in 2026. If met, it would imply a satisfactory 3.9% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 25% to US$0.21. Before this latest report, the consensus had been expecting revenues of US$58.0m and US$0.20 per share in losses. Overall it looks as though the analysts were a bit mixed on the latest consensus updates. Although revenue forecasts held steady, the consensus also made a moderate increase in its losses per share forecasts.
Check out our latest analysis for HLS Therapeutics
As a result, there was no major change to the consensus price target of CA$7.36, with the analysts implicitly confirming that the business looks to be performing in line with expectations, despite higher forecast losses. 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 HLS Therapeutics, with the most bullish analyst valuing it at CA$12.01 and the most bearish at CA$4.45 per share. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the HLS Therapeutics' past performance and to peers in the same industry. For example, we noticed that HLS Therapeutics' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 8.0% growth to the end of 2026 on an annualised basis. That is well above its historical decline of 2.0% a year 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 revenue grow 9.8% per year. Although HLS Therapeutics' revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at HLS Therapeutics. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that HLS Therapeutics' revenue is expected to perform worse 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.
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 HLS Therapeutics analysts - going out to 2028, 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 HLS Therapeutics that 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.